While the banking industry can congratulate itself on watering down the financial reform effort in the United States, they have a big battle on their hands internationally as well. Basel III is expected to require big banks set aside more capital and hold a minimum level of liquid assets from the end of 2012. And that has the banks lobbying hard, arguing that growth would be jeopardized.

It remains to be seen how all this will shakeout. So far, the movement to raise global capital standards is moving in fits and starts. European governments have demanded more time to let their home banks comply. MSNBC notes that the banks appear to be winning this battle. The regulators writing the Basel III rules agreed to pare back requirements for higher liquidity. "Instead of a concrete proposal that would have required banks to keep a stable net funding ratio that aligned the maturity of assets and liabilities (and which would have required banks to be more liquid if they owned assets with longer maturities), the Basel III regulators will propose a much more vague system of "oversight." The next Basel Committee meeting will be July 15. We may get more concrete news then. 

On another issue, the G20 agreed to give countries a choice on whether to levy a tax on banks in order to recoup the cost of bailouts. The United States and Europe have pushed for such a tax, while countries including Canada objected on the grounds their banks acted conservatively and should not be punished.

For more:
- here's an article from Risk
- here's a Reuters overview

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