The UK is digging its heels in over the European Union’s interpretation of banking rules designed to harden the defenses of banks against a repeat of the global financial crisis—as one survey suggests that banks have some way to go until they can meet the requirements.

EU finance ministers failed to reach an agreement earlier this week to toughen bank capital adequacy rules agreed on by the Basel Committee on Banking Supervision, or the so-called Basel III regulations, as UK chancellor of the exchequer George Osborne accused other finance ministers of the 27-nation bloc of trying to water down the rules.

“I am not prepared to go out there and say something that is going to make me look like an idiot five minutes later,” he told reporters outside the meeting in Brussels.

Osborne wants the power to enforce much more stringent controls on banks than Basel III accounts for, should the need arise, to prevent a repeat of the current crisis, and said the regulations currently on the table could damage London as a financial centre.

France and Germany, meanwhile, want to harmonize the capital rules to prevent a race by banks to show who can hold the biggest reserves, and therefore show who is the stronger. They also argue that holding too much capital will stifle any economic recovery in Europe.

“London is a very important center but there are other centers alongside London which also merit consideration,” said Michel Barnier, the European Union’s financial services commissioner.

The Basel Committee on Banking Supervision, a group of central bank governors from the world’s leading economic nations that formulates broad supervisory standards, published the first version of Basel III in late 2009. Largely in response to the credit crisis, banks are required to maintain proper leverage ratios and meet certain capital requirements. The rules, which governments around the world must start to implement from the beginning of next year, require all banks to strengthen their capital reserves by raising total core reserves to 7% from 2% at the moment.

EU finance ministers will meet again on May 15 to discuss the Basel III plans with the German-Franco block threatening to decide the decision under the qualified majority vote format, which would likely see Britain lose. Sweden, which like the UK also boasts a large financial services center, is also broadly backing Osborne’s stance.

”We took a big step towards an EU agreement on capital requirements for banks,” said Denmark’s finance minister Margrethe Vestager. Denmark currently hold the six-monthly EU presidency and is responsible for the functioning of the Council of Ministers.

“It is my assessment that the time is right for an agreement based on the presidency’s compromise proposal but there is a need for a round of technical clarifications before we can close the case. There is a supporting qualified majority but we would like to widen this support even further. I hope that we can reach an agreement at the coming meeting on May 15. Requirements that help securing healthier banks is an important lesson from the crisis.”

Commissioner Barnier added: “I came to the Council determined to see three principles respected in the negotiations and they are: any agreement has to be in conformity with Basel III; any agreement has to guarantee and deepen the ‘single market’; and any agreement has to contribute to financial stability. We are on the road to finalizing a compromise on May 15 which respects these three principles.”

Meanwhile, the Bank for International Settlements, an inter-governmental organization of central banks, has published a recent report saying that of the 103 group one banks, or the largest banks, that participated in the study it found that €485.6 billion was still needed to be found by these banks to meet Basel III requirements. While the study also found that there was a shortfall of €32.4 billion to meet Basel III for the 109 group two banks that participated in the survey.