The world's top countries face more wrangling over a global bank tax next week and crunch time over beefing up capital and cutting risks at big banks.
Finance ministers from the Group of Twenty countries meet in the South Korean port of Busan on June 4-5 to review pledges their leaders made last year to learn from the worst financial crisis since the 1930s.
They will welcome progress in the United States where President Barack Obama may be signing into law in July a bill implementing most of the G20 pledges, three years after the crisis kicked off in a corner of America's housing market.
The European Union is set to approve this year reform of supervision, hedge funds and bank capital and implement new rules on credit rating agencies and securitization.
But ministers will also remind each other of the need to coordinate their actions after Germany stunned global markets and its EU partners this month with a unilateral ban on naked selling of sovereign credit default swaps and euro zone debt.
Fresh clashes over a global bank levy appear inevitable.
The International Monetary Fund proposed two taxes on banks in April to pay for future bailouts but was sent away to refine its ideas after ministers made no headway.
No deal on a uniform tax is likely next week or perhaps even in Toronto late June when the group's leaders meet.
Canada remains fiercely opposed, with Australia and South Africa lukewarm, and Japan believes its deposit insurance scheme does the trick. A tax is a popular headline grabber in Germany, France, Britain and United States to quell public anger over massive chunks of public aid used to shore up banks.
Diplomats expect G20 countries to end up tailoring any levy to their national circumstances.
BASEL LITMUS TEST
Regulators fear spats over a tax will detract the G20 from two harder tasks: finalizing tough new Basel III global bank capital and liquidity standards by year end, and making progress on tackling too big to fail banks.
Bank capital is like a train in a dark tunnel -- nobody can see it and when it does come out, it does not capture the public's imagination, a G20 official added.
The G20 has agreed that Basel III should be finalized this year and implemented by the end of 2012.
A delay in the introduction of separate, tough new bank trading book capital rules that were due in January is a stark reminder of the difficulties ahead, not least from the industry.
Leading banks meet in Vienna before the G20 summit and will publish estimates on the impact of Basel III.
The content and timing will have a very significant impact on global economic recovery, said Peter Sands, chief executive of Standard Chartered and senior figure at the Institute of International Finance (IIF), a global bank lobby.
The United States is also worried a new leverage cap in Basel III will be diluted by countries like France.
Leverage is something that absolutely needs to be addressed by the regulators, Deputy U.S. Treasury Secretary Neal Wolin said this week.
TOO COMPLEX TO WIND UP?
Taking coordinated action to deal with too big to fail banks will be just as hard, as highlighted by the United States pushing its Volcker rule ban on proprietary trading which the EU rejects as a solution.
Big banks are required by the G20 to draw up living wills or blueprints for speedy wind up if in difficulties but some banks are simply too complex and interconnected to be wound up easily under existing insolvency laws, regulators say.
This leaves G20 members with the task of finding enough political resolve to carve up banks into simpler chunks or radically overhaul international bankruptcy laws.
Credit rating agencies may come under the lash.
Germany wants tougher scrutiny and more competition after Standard & Poor's downgraded Greece's debt to junk just as a rescue package was being stitched together.
China is keen on making investors to pay for ratings to end a conflict of interest whereby agencies get their income from fees paid by companies whose bonds they rate.