Britain and Canada offered broad support for US Treasury Secretary Timothy Geithner's plan for a radical reform so that banks set aside enough capital to avoid a rerun of the government bailouts during the credit crunch.
But France and Germany were cool as they pushed for more countries to adopt the Basel II rules in full, something which the United States has resisted.
Saturday's meeting arrived at no precise figure on how high bank capital should be once economic recovery is assured, now forecast for 2010 or 2011. Canada's Finance Minister Jim Flaherty said it will be up to individual countries to determine capital levels at banks.
This may help avoid the years of squabbling that led to the current Basel II capital rules, but it could spark regulatory arbitrage between jurisdictions. For banks, it may make little difference in practice.
"We are already holding more [capital] than we need to under the Basel II rules in anticipation of changes," an investment bank official said.
Much of Saturday's communiqué on financial regulation reiterated pledges from April and refers to work already underway, such as beefing up the Basel II rules by requiring higher capital on trading books and including a leverage ratio.
Ministers also fleshed out how they want to see bank pay packages structured, largely by stressing the need to properly implement principles they already agreed in April.
Still, backing clawbacks of bonuses paid for performance which in hindsight proves unmerited marks a toughening of language, along with a crackdown on guaranteed bonuses.
However Paul McCarthy, a lawyer at Allen & Overy, said these new rules would make little practical difference to how banks already reach their pay packages. "If you look at the pay structures they have at the moment, everything is there."
Much to the relief of bankers, ministers declined to back French calls for a cap on pay and thus tackle the main target of public anger over banks - the actual levels of pay, especially at banks propped up by taxpayer money.
Nevertheless, the FSB, a council of G20 member state finance ministry, central bank and regulatory officials, will study the issue of pay restrictions further and report back to the Pittsburgh summit on 24-25 September.
(EurActiv with Reuters.)
