The European leaders' crisis meeting in Brussels has this morning reached "broad agreement" on requiring banks to raise their core Tier One capital to nine per cent by June.The recapitalisation of the banks is one of three issues that many observers say must be resolved to head off the crisis in the European financial system. The others are an investor "haircut" on Greek bonds, and a bond-buying rescue fund within an expanded European Financial Stability Facility (EFSF).The meeting is important to Australian banks because a satisfactory deal could help re-open long-term funding markets that have almost ground to a halt in recent months.After leaders of 27 European nations this morning wound up their meeting, signs began to emerge that the meeting made progress.US stocks rose as outlines of the meeting began to leak out, with the S&P 500 gaining 1.1 percent to 1,241.99 at 4pm New York timeBut it is also clear that elements of a final crisis deal are still to be put in place.Swedish prime minister Fredrik Reinfeldt said the very complex and technical nature of the issues meant a full solution would probably not be achieved at the summit, the Financial Times reported. Leaders might need more time to set up "parallel answers" to the three key issues.Polish finance minister Jacek Rostowski said the size of the "haircuts" to be "voluntarily" taken by banks holding Greek debt would not be announced at the summit, the FT reported.There were reports this morning that French President Nicolas Sarkozy and German Chancellor Angela Merkel would meet Greek creditors in Brussels tonight in an attempt to get a deal on debt renegotiation. European negotiators have pressed for a 60 per cent haircut; private lenders want 40 per cent.Meanwhile, China and other developing countries emerged yesterday as a potential source of cash for an expanded EFSF.Under the plan European leaders were expected to approve, the EFSF would buy government bonds of stressed governments in economies like Italy and Spain. China, Brazil and other cash-rich developing countries could contribute to a special fund that would give the EFSF more leverage.Outlets including Bloomberg reported that French president Nicholas Sarkozy would tomorrow talk with Chinese president Hu Jintao about a possible arrangement.In the hours before the summit, German chancellor Merkel won strong support in the German parliament for pursuing the mooted Euro-crisis deal, including the expansion of the EFSF. The Bundestag voted 503 to 89 in favour of the rescue fund after Merkel told them: "The world is watching Europe and Germany ... watching whether we're ready and able in the hour of Europe's deepest crisis since the end of World War II to accept responsibility."