Hey, guess what – the G-20 is against systemic risk, but should there be any, it’s also against taxpayers paying for it.  For good measure, the G-20 is also against trade imbalances and currency misalignment.  As for me, I’m in favor of being 5’11” and a size two.  The tricky bit is how.

Our favorite bit in the G-20 communiqué is its start, where one finds the ringing declaration that, “We, the Leaders of the G20, are united in our conviction that by working together we can secure a more prosperous future for the citizens of all countries.”  Whew!  We thought for a while they were figuring out ways to argue with each other to promote poverty, war and the forces of evil.

The reasons for this high-level circumlocution is two-fold:  first, communiqués from heads of state rarely say anything unequivocal because most agreements in principle break down in detail.  And, at the Seoul summit, even agreements in principle were hard to find.  The summit blessed Basel III, but little else from the high-faluting initial list of actions planned for them by the Financial Stability Board.

Of course, the FSB didn’t give them anything much to endorse with specificity other than Basel III.  SIFI action is stymied by deep disagreements over what to do about cross-border resolutions and big-bank regulation.  In the midst of the crisis, regulators agreed that SIFIs needed succor.  Now, though, they’ve thought this through, realized how much a global SIFI regime challenges home-country regulations and just how hard it is to balance prudence with profit.  Any of the SIFI sanctions will cost covered firms a lot.  Even if  regulators are in a bloody-minded mood about bank profit, some of these costs clearly come at the expense of prudential policy, where undue separation of parts of complex banking organizations can lead to trapped pools of capital or liquidity that increase – not reduce – systemic risk.

Can global officials agree on anything other than Basel III?  If there’s any new consensus – and that’s increasingly chancy – it will come on G-SIFIs.  Translation:  G-SIFIs are global systemically-important financial institutions or the biggest of the big banks (and they’ll all be banks, we think).  Although regulators have agreed to disagree on SIFI regulation, G-SIFIs still scare them enough to contemplate collegiality.

If a G-SIFI regime in fact emerges from FSB deliberations next year, it will craft a utility-style framework for these institutions that will sharply differentiate them not just from SIFIs and the rest of the financial-market’s riff-raff, but also from any business model previously known to banking.  G-SIFIs won’t go gladly into that good night, ensuring at the least a lot more talk before there’s any meaningful global action.