13 European countries including Germany and France rejected a European Union plan to restrict banks' investments in asset-backed bonds and other risk-sharing instruments.

The draft measure by the European Commission would bar banks from buying risk-transfer instruments, including credit derivatives, unless their issuer retains a 10 percent stake in the security. The plan was part of a broader revision of capital rules responding to the credit-market turmoil.

The measure would require EU banks to obtain a letter of commitment that the seller of an asset-backed security will maintain a stake of at least 10 percent in the security or the underlying assets. Without that proof of ownership, the EU institution wouldn't be allowed to hold the security.

The plan would force lenders to maintain an interest in their loans, if they wish to sell part of them to European banks, according to the commission. The restriction would apply to any risk-transfer mechanism, including credit derivatives, often used to hedge against the risk of default.

Opponents argue that it would be hard to comply with the new rules and that it would drive up the cost of making loans.

After opposition from so many countries it is doubtful that the initiative can win approval.