The European Union failed to seal a deal on Basel bank rules yesterday after disagreeing at talks in Brussels on bonuses, capital requirements for big lenders and powers available to the European Banking Authority. Members of the European Parliament and diplomats agreed to reconvene on February 27 after their negotiations ended without a deal on how to implement components of the Basel bank regulations in the EU. Othmar Karas, the legislator in charge of the EU parliament's work on the rules, said: "We are not ready now." Referring to the grouping of EU governments currently chaired by Ireland, Karas said "the council had no mandate to finalise" the discussions. However, he said the talks did find consensus on the need to phase in a liquidity ratio by 2018, one year ahead of the schedule agreed on last month by global regulators. The EU has struggled to agree on legislation to apply the international standards on capital, known as Basel III, which were published in 2010 as part of efforts to prevent any repeat of the financial crisis that followed the collapse of Lehman Brothers. EU politicians have insisted that the legislation to implement Basel III must include curbs on variable pay, as part of a quest to reshape lenders as utilities rather than money-making machines. Members of the assembly's economic and monetary affairs committee called last year for an outright ban on bonuses that exceed fixed pay. However, Isabel Pooley, a lawyer at CMS Cameron McKenna, said: "Imposing a cap on the ratio of variable to fixed pay runs a high risk of increasing fixed salaries." Governments sought to reopen a draft deal reached in December by the assembly and Cyprus, which then held the EU presidency, to cap banker bonuses at twice fixed pay. Under that proposal, bonuses exceeding fixed salary would be allowed only if the majority of a bank's shareholders voted in favour. Several nations, including Britain, opposed that plan at a meeting last week. The British proposal included retaining existing EU rules that require some portion of bonus awards to be deferred and ensuring that payouts can be clawed back, according to officials. The Basel Committee on Banking Supervision brings together banking regulators from 27 nations, including the United States, Britain and China, to coordinate their prudential rule-making.