The Basel Committee on Banking Supervision is working out new rules - known as Basel III - that will require banks to hold top-quality capital worth seven per cent of their risk-bearing assets.
However, Mr Mersch is concerned that an additional capital surcharge for the biggest international banks will hurt the large institutions of continental Europe disproportionately, Reuters reports.
He commented: "The new rules lead to comparative disadvantages to the European banking system.
"The US banks rely more on fees than on deposits. The global playing field will be tilted."
Mr Mersch, head of Luxembourg's central bank, made his comments during a speech in Istanbul on Sunday (October 31st).
The Basel Committee is chaired by Nout Wellink, who is also a member of the ECB Governing Council.
By Claire Archer