Abstract. We examine the interaction of near-surface and near- bottom flows over bottom topography. A set of asymptotic equations for geostrophic currents in a three-layer fluid is derived. The depths of the active (top/bottom) layers are assumed small, the slope of the bottom is weak, the interfacial displacement is comparable to the depths of the thinner layers. Using the equations derived, we examine the stability of parallel flows and circular eddies. It is demonstrated that eddies with non-zero near-surface component are always unstable; eddies localized in the near-bottom layer may be stable subject to additional restrictions imposed on their horizontal profiles and bottom topography.