FACTBOX - EU set to beef up financial regulation

(Reuters) - European Union governments and the European Parliament are set to make significant progress on adopting a raft of measures imposing sweeping changes on regulation faced by banks, insurers, mutual funds and savers.

Some of the measures apply lessons learnt from the worst market crisis since the 1930s.

EU finance ministers and the European Parliament's economic and monetary affairs committee meet separately on Tuesday to push ahead with four key items of regulation over which they have joint say.

Final agreement is due next year but the main outlines will be set on Tuesday.

CAPTAL REQUIREMENTS DIRECTIVE

-- Aims to beef up how much capital banks must set aside to cover risks on their books and harmonise what instruments a bank can use to calculate capital requirements.

-- Ministers are due to endorse a requirement for banks to retain 5 percent of any securitised product they sell in order to encourage higher underwriting standards. Britain has opposed any retention and the securitisation industry has said such a move will damage the sector.

-- Colleges of supervisors will be set up for each cross-border bank. However, a provision that would give a bank's home regulator the last word will be weakened significantly due to opposition from a large number of states.

-- It limits a bank's exposure to another bank to 25 percent of its capital base.