Economic research firm IHS Global Insight says that efforts to bolster financial industry regulation are encouraging, but the devil is in the details, and they have yet to be worked out.

“The global economic crisis has spurred unprecedented international momentum behind financial sector reform,” the firm notes. However, the key is coordination so that a level playing field exists between major financial centres.

On the face of it, the G20 meeting of finance ministers in London late last week was a success, the firm says.

“There was broad agreement on reining in the bonus culture among banks, as well as on tighter balance-sheet requirements for the institutions. The devil is in the details, however—can the broad agreements be translated into specific measures in time for the September G20 summit?”

In terms of strengthening banks’ capital, Global Insight notes that “there was agreement on broad principles, but the questions of implementation and enforcement were left open.”

Similarly on the issue of bonuses, the meeting produced a set of guidelines governing bonuses, but it did not agree on a set cap. “The guidelines meanwhile call for a large portion of bonuses to be retrievable if the bank’s performance deteriorates. How the deferral and clawback processes would work is unclear, however,” it says.

“Although it is clear that there remain differences in emphasis between key governments, the London meeting shows that there is still international momentum behind co-ordinated financial reforms. Without agreement on broad principles, the prospects of individual governments taking bold steps that could undermine the competitiveness of their financial sectors would be limited,” it notes.

Looking ahead, the firm stresses that the next few weeks will be critical as a more concrete agreement is prepared ahead of the Pittsburgh summit.

In terms of the fiscal and monetary policy measures being employed to fight the crisis, IHS Global Insight observes that the ministers pledged to maintain policies designed to support economic growth, but did not give any details as to when they would see fit to start unwinding them.

“It seems it will be up to key governments such as the United States to set precedents unilaterally when they feel the time is right. Certainly, recent statements from monetary policy authorities have suggested that the unwinding is still some time off, lest nascent recovery is jeopardised. Some finance ministers at the meeting—including Brazil’s—warned that a double-dip recession was still possible. Germany has by contrast been the most vociferous advocate of developing exit strategies, but even it is opposed to setting any timetable at this stage,” it concludes.