More than six years after the 2008-09 crisis, the Group of 20 economies is this month set to approve the last major piece of regulation designed to avoid a repeat of the bank collapses that led to massive taxpayer bailouts in the United States and Europe.

The reform, which requires the biggest banks to hold a substantial layer of bonds that can be converted into equity if the lender hits trouble, follows the introduction of rules known as Basel III that increased the amount of capital banks must hold, as well as curbs on bonuses, risk-taking and trading.

Regulators say the G20 summit represents a milestone that will allow them to shift focus away from rule-making, to implementation.

But bankers are not calling the turn yet.

Many say another wave of capital demands is coming down the tracks from precisely that review and standardisation phase.

"We are now looking at capital increases that are significant across the industry - potentially larger than earlier capital rule changes that were specifically designed to increase capital levels," said Wilson Ervin, vice-chairman in Credit Suisse's executive office.

The drive to keep up close bank supervision was illustrated on Thursday when regulators said Europe's lenders would be tested to measure their financial resilience next year, although there will be no minimum capital hurdle. It came a day after the European Central Bank's chief supervisor said some still faced a "significant credit risk".

'CAUTIOUS ABOUT SIREN VOICES'

G20 leaders, meeting in Turkey on Nov. 15-16, are due to endorse the reform that requires the world's 30 biggest banks including HSBC, Credit Suisse, Goldman Sachs and JPMorgan to hold bonds that can be "bailed in".

But Ervin said a separate review of banks' trading books, coupled with how the bail-in bonds plan is structured, means the 30 top banks face having to collectively issue $1 trillion more of the bonds than they originally thought.

Banks also say they need to increase capital due to moves by the Basel Committee and other regulators to standardise how the riskiness of loans is calculated.

Several other senior bankers have voiced concern that there is no end in sight to the rising regulatory burden.

"Compliance with the new requirements will come at a significant additional cost," UBS CEO Sergio Ermotti said on Tuesday after cutting profitability targets.

"Regulation and the macroeconomic environment have changed materially. So we need to adjust both our actions and our expectations accordingly," he said.

Some bankers are so concerned they have dubbed the implementation process over the coming years as "Basel IV".

Any prospect of more capital demands could set the scene for a renewed battle between banks and policymakers over how best to pull off the balancing act of reining in lenders to ensure they are not 'too big to fail', while freeing them to lend more to boost sputtering economies.

Regulators say talk of "Basel IV" is scaremongering.

"There's not an appetite to layer on more and more," William Coen, secretary general of the Basel Committee group of regulators, told Reuters last week, though he acknowledged selected banks could face higher requirements.

"We work quite a bit with the industry so really there shouldn't be any surprises. We have done a good job at telegraphing the level of capital," he said.

Regulators have also said there appears to be waning political support in some countries for more reforms, but they are unequivocal on one thing - there is no going back to the light-touch regulation seen before the crisis.

"Let's be cautious about the siren voices of financial self interest that were partly responsible for luring us on the rocks in the first place," Paul Fisher, deputy head of the Bank of England's Prudential Regulation Authority, said in September.

BONUSES

Regulators have waged a two-pronged attack on banks to improve their capital strength, requiring firms to increase the amount they hold in reserve for when trouble hits, and making sure capital quality improves so it can genuinely absorb losses.

Royal Bank of Scotland, the biggest casualty of the crisis after needing 46 billion pounds of British taxpayer cash, illustrates the regulatory shift.

At the end of 2007, its core capital represented 4.5 percent of its assets on a risk-adjusted basis (RWAs). Now it holds common equity - which is far higher quality capital than the old measure - of 16.2 percent.

The world's top 100 banks all now hold common equity above the new minimum requirement of 7 percent of RWAs. They have filled a shortfall that was estimated at 486 billion euros ($538 billion) in mid-2011, and in that time improved their common equity ratio to 11.1 percent on average from 7.1 percent, the Bank for International Settlements has estimated.

Policymakers and banks have also been at loggerheads over attempts to rein in high pay, which many regard as the main driver of the risk-taking that drove banks to the brink.

Europe has told banks they cannot pay bonuses higher than twice the salary, but even some policymakers say that has merely seen firms increase fixed pay, side-step the rules with "allowances".

More successful have been regulatory moves to defer bankers' pay by up to seven years and pay more out in stock.

Capital and pay are two of the highest-profile areas of new rules, but policymakers have been busy across many other areas.

More stringent liquidity and leverage rules, more regular and robust stress-testing of banks and tougher governance making executives and senior managers more accountable for their actions are in place or coming into force.

Policymakers are worried about reform fatigue setting in after years of rulemaking. They want banks to have a clear picture of the rules they face, to free them up to lend more.

"The authorities generally, including regulators, do not want the stability of the graveyard," said the Bank of England's Fisher.

(Reporting by Huw Jones and Steve Slater; Editing by Pravin Char)

By Huw Jones and Steve Slater