LONDON -- Those hoping for a little less conversation and a bit more action out of this weekend's G-20 summit in London are likely to be disappointed. The meeting of finance ministers being held in the British capital on Friday and Saturday would be a "stock-taking meeting" rather than one involving "new initiatives," U.S. Treasury Secretary Timothy Geithner said Thursday. His comments reflect the tensions that have developed ahead of the larger meeting of G-20 heads of state in Pittsburgh, Pa., on Sept. 24 to 25.  While the U.S. is keen for more banking regulation--the Obama administration released a proposal for deeper capital cushions for banks on Thursday for instance--it is wary of joining the tirade against bonuses that have been led by German Chancellor Angela Merkel and French President Nicholas Sarkozy.  These two are keen to kick off major reforms on salaries, including caps and limits on the time period for which guaranteed bonuses can be given, as early as this meeting. "Cracks are showing in the consensus," says Giles Wilkes, senior economist at London-based think tank CentreForum. "They're going in different directions on a number of issues." Perhaps the most lacking in direction is Britain. While U.K. Treasury minister Alistair Darling said he expected an agreement on bonuses to be reached at the London summit, he did not join seven finance ministers, including from France, Sweden and Italy, in calling for the G-20 to "act decisively" on bonuses and for a "strict compensation policy to be put in place," in a letter sent to the Financial Times.  Britain has already been accused of watering down a code of conduct on bank payment after tough talk at the last G-20 summit in April. (See "Britain Mulls Bonus Clawbacks.") Fortunately, there are a few things people seem to agree on: despite optimism about the speed and strength of the global economic recovery--including from the OECD on Thursday--leaders agree they have to be careful not to rush out of stimulus programs, says Wilkes. "The stimuluses are working and no one wants to mess it up."
Can finance ministers come to an agreement and prevent an even deeper divide ahead of the G-20 Summit of global leaders in Pittsburgh?