Brussels and compromise go hand in hand. No surprise, then, that EU finance ministers have finally backed new bank capital rules – implementing internationally agreed Basel III standards within the bloc – that no one thinks ideal.

The most publicised compromise is the UK’s acceptance of rules that set fixed, rather than minimum, standards. In return, though, it has secured the right to impose additional “systemic risk buffers” of up to 5 per cent – on top of the 7 per cent core tier one ratio demanded under Basel – without too much EU interference. This will not end arguments over whether it is preferable to let countries set their own higher bank capital standards or to have a uniform rule book. But at a practical level, the compromise does give national governments reasonable flexibility. In particular, it should allow Britain to go ahead with reforms that would ringfence domestic banks’ retail operations and impose core tier one ratios of 10 per cent. Not too bad.

Less satisfactory is the temporary sidestepping of double-counting challenges posed by the “bancassurance” model (when banks hold substantial investments in insurance businesses). Tightening up will depend partly on reviewing a different set of EU rules. And while Basel’s strict criteria for determining what counts as core tier one capital have been followed, the language may yet allow for some “silent participations” – hybrid capital favoured by Germany – to count.