One step in along process

So far, both the United States and the European Union (EU) have adopted an ambitious package to strengthen financial regulation, but differences remain on how far they should go in the international push.

Even within the EU, Germany and France even can not see eye to eye with Britain. While Berlin and Paris strongly support tougher financial regulation, London is simply afraid that its financial power would be undermined.

German Chancellor Angela Merkel warned ahead of the G8 summit that governments would fight off any attempt by banks to water down tough reforms of financial regulations.

"There is perhaps a certain danger that banks which are doing quite well again might try to not exactly support the regulation efforts, but to put them in doubt again," Merkel told the Wall Street Journal Europe in an interview.

She said that bank reforms must not wane although the economy is showing tentative signs of improvement.

Putting the results of the G8 summit into doubt, Italian Prime Minister Silvio Berlusconi played down on Friday any prospect of the summit agreeing new rules for global finance, saying it will be just "one step" in a long process.

"We will need many steps before we arrive at a common rulebook," Berlusconi said. "L'Aquila is one step towards further analysis."

(Xinhua News Agency July 8, 2009)