Crisis-forged unity among the Group of 20 rich and emerging economies may be fraying before the problems they set out to address are solved.
Despite bold pledges to rein in risky bank behavior and ensure taxpayers never again foot the bill for salvaging firms on the brink of collapse, domestic regulatory reform efforts are bogged down in legislative mud, and there is growing concern that cross-border cooperation will be tough to secure.
While the financial crisis has subsided, big questions remain about what will sustain the recovery once emergency government spending and lending programs expire, particularly when most rich nations face heavy debt burdens that they may need to begin paring as early as next year.
Those issues are likely to dominate discussions at this week's meetings of G20 finance leaders and the International Monetary Fund in Washington.
There are signs that the spirit of unity in addressing global challenges may be waning, said Charles Dallara, head of the Washington-based Institute of International Finance, which represents banks.
These (meetings) will widely be seen as a test of the continued willingness of the world's economic and financial leaders to pursue the high road of global economic and regulatory coordination, he said.
On one of the most controversial issues -- how to shift the cost of bank bailouts off taxpayers -- Canadian Finance Minister Jim Flaherty said there was no G20 consensus.
The United States and other countries have pushed for a bank levy to cover the cost, while Canada has been among the most vocal opponents of that idea.
Not all countries have the same point of view as us and not all countries have the same point of view as those that are advocating a bank tax, so there's a mixed response, Flaherty said.
The IMF is expected to present its findings on how best to make banks pay for financial crises to G20 finance ministers at this week's meetings.
On Wednesday, the IMF will release its economic growth forecasts. They are expected to show large emerging economies such as China leading the recovery, while Europe lags and the United States chugs along somewhere in between.
Douglas Porter, deputy chief economist for BMO Capital Markets in Toronto, likened the gap between emerging and developed economy growth rates to ships passing in the night.
One is a tugboat, pulling along mightily with all its effort, but restrained by the heavy load of a still-weak banking sector, an overburdened consumer and the now-massive fiscal debt burden it must reel in over the years ahead, he said. The other is a sleek speedboat flying across the water, with none of that excess baggage to hold it back.
China has taken some steps to keep its economy from overheating, including moves last week aimed at cooling the property market. However, its stockpile of reserves continues to grow, edging closer to $2.5 trillion at the end of March.
That has fueled fears that the global economy is dangerously unbalanced, with huge debt burdens in the United States and other rich countries.
Greece's debt troubles have pushed sovereign debt concerns to the forefront, and both its problems and the broader matter of fiscal policy are expected to be on the agenda for both the IMF and the G20.
The G20 agreed last year to a framework for rebalancing growth. But implementing it is likely to prove difficult -- particularly when countries are asked to adopt policies that may hurt their own domestic growth.
The IIF's Dallara told Reuters in an interview that unless countries get serious about addressing those imbalances, markets will eventually force the issue.
The alternative is simply to wait until the markets put a country under the bull's-eye, he said. We see that happening with Greece today and we see how disruptive it is. We should learn the lesson: it doesn't pay to wait until markets put pressure.
(Editing by Dan Grebler)