Key Group of 20 leaders and the International Monetary Fund urged governments on Tuesday to redouble efforts in tightening up financial rules as some countries lag in curbing bank pay.
World leaders congratulated themselves in Pittsburgh last September after agreeing to a sweeping set of reforms that apply lessons from the worst financial crisis since the 1930s.
Turning pledges into coordinated action is facing resistance over timing and substance from some banks and countries.
"One of the lessons of the crisis is that facing global challenges we need to have global answers," IMF Managing Director Dominique Strauss-Kahn told the Romanian parliament during a flying visit to Bucharest.
"This lesson is about to be lost," he said.
The IMF chief said individual countries were working on new regulations and creating new supervisory bodies.
"The only problem is, they don't fit together," he added.
The G-20's steering countries said in a letter to all group members that governments must recommit and deliver on reforms they agreed to in Pittsburgh.
"We all have a mutual responsibility to deliver on all our commitments to address the weaknesses that led to the financial crisis," the letter said.
"This will require that we maintain our vigilance to address the required reforms and guard against complacency as our economies recover," it added.
Bank of England director of financial stability Andrew Haldane said it is possible that no amount of capital or liquidity will be enough to totally shield taxpayers as profit incentives may place risk one step beyond regulation.
"That means banking reform may need to look beyond regulation to the underlying structure of finance if we are not to risk another sparrow toppling the dominos," Haldane said.
But G-20 leaders said there can be no let-up on efforts to agree a new set of bank capital and liquidity rules — dubbed Basel III — for implementation by the end of 2012.
They singled out the need to still include a leverage ratio or cap in Basel III as some countries like France have expressed concerns about its impact.
The letter also said all countries must have adopted the existing Basel II bank capital framework by 2011, a reminder to the United States which has yet to implement it in full.
They also reiterated the need to regulate over-the-counter derivatives by the end of 2012 and implement the G-20's principles aimed at curbing big bonuses for excessive risk-taking at banks.
The Financial Stability Board, tasked by the G-20 to implement its regulatory pledges, said several countries have yet to fully apply the remuneration principles.
They were agreed in part to help quell public outrage at the return of big bonuses in a sector that had to be shored up by taxpayers during the financial crisis.
"Firms will need to maintain momentum toward reforming their compensation practices through 2010 and beyond," FSB Chairman Mario Draghi said.
Many of the major financial centers like the United States, Britain, Germany, France, Japan and Hong Kong have taken the regulatory or supervisory steps needed to implement the code.
Argentina, Brazil, Singapore, India, Indonesia, Mexico, Russia and Turkey lag, the FSB said.
British Bankers' Association Chief Executive Angela Knight said on Tuesday there is a "dramatic difference" between what the G-20 has agreed and what is being implemented.
"If there is different implementation on pay then we move from one set of regulatory arbitrage to another set of regulatory arbitrage," she told a corporate governance seminar.
G-20 finance ministers will review options from the IMF next month in Toronto on how to make the banks pay for rescues, the G-20 letter said.
Strauss-Kahn said in Bucharest he would present proposals for imposing a levy on banks, signaling growing support for such a measure as initial hopes for a "Tobin-style" transaction tax are all but dead.
The United States is already planning a bank levy and such a measure is now finding support in Britain, France and Germany.
"I am more optimistic now that we can get an international levy or tax than I was six months ago," British finance minister Alistair Darling told parliament.
"I think you will find the finance ministers .. are far more amenable now at looking at seeing if we can put in place a system that works," Darling said.
French Economy Minister Christine Lagarde travels to attend a meeting of the German cabinet on Wednesday where proposals for a bank tax will be discussed.
Progress on a global bank levy deal next month could help the G-20 show critics that it can't be written off just yet.
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