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(Adds detail on European position)
By Huw Jones and Maya Nikolaeva
LONDON/PARIS, June 12 (Reuters) - Europe, led by France, is set to scupper attempts this week to reach a compromise deal on bank capital rules, arguing that the levels being set to avoid future taxpayer bailouts are too high, people familiar with the talks told Reuters.
Banking regulators from across the world meet on Wednesday and Thursday in Sweden in a fresh attempt to get agreement on completing Basel III, a set of tougher capital requirements initiated in the aftermath of the 2007-09 financial crisis.
But no final deal is likely this week given that France, backed by Germany and the Netherlands, is unhappy with the package on the table, which aims to ensure that banks are consistent in how they measure risks from loans to determine capital buffers, bankers and other sources said on Monday.
"We are not going to get a deal," one person familiar with the Basel Committee negotiations said.
The main stumbling block is a proposed "floor" which would mean capital cannot fall below 75 percent of the "standard" approach set out by regulators and used by most lenders, while big banks use models to add up risks instead.
"Some are unhappy about the 75 percent because it is too high, some don't like it because it is too low, but everyone has signalled a willingness to agree on a certain number," the person said.
France, Germany, the Netherlands and the European Commission have submitted a joint position to Basel which says the 75 percent floor in not acceptable, a second person close to the matter said.
"It's a relatively united European front," the person said.
A legislative proposal from the commission, backed by countries such as like France and Germany, would be needed to implement the Basel package.
While European banks fear they will have to find significant amounts of extra capital under what they dub Basel IV, the United States does not want the floor set too low.
The Bank of France, a member of the Basel Committee, referred on Monday to comments by its governor Francois Villeroy de Galhau in May when he said he wanted to complete a Basel package based on improved and better supervised internal models.
"It is better to give it some time to reach a good agreement than to rush to bad arrangements," de Galhau said last month.
A Paris-based banking executive said he wanted to ask French President Emmanuel Macron for a global moratorium on new capital rules at the G20 level, although bankers also fear that France could end up being isolated.
The hope is that enough progress is made this week for it to be referred for the second time this year to Basel's oversight body to broker a final deal before momentum runs out.
"There is a clear sense of fatigue," the person said.
Basel has already signalled that the package could take up to a decade to come in to soften the hit to a few "outliers". (Additional reporting by John O'Donnell and Frank Siebelt in Frankfurt; editing by Alexander Smith/Keith Weir)