US and European financial regulators are wrangling over who is doing a better job of implementing the Basel III global banking rules agreed last December.The criticisms the two are making of each other underscore delays in implementing Basel III standards. But they also show that regulators in both blocs remain convinced the rules must be implemented.Last week, the Financial Times published a letter to US Treasury secretary Tim Geithner from European Union financial markets' chief, Michael Barnier. The FT's published excerpts suggest the EU wants the US to implement Basel III more quickly and apply capital requirements and other rules as tough as those being put in place in Europe."The level playing field must be a reality, not an empty slogan," the FT reported Barnier as writing. It also reports Barnier asking Geithner to "respect the deadlines" and reminding him that the US has not yet even implemented the earlier Basel II standards.Barnier also criticised the US's measures to limit risk-taking incentives in senior US bankers' pay. The FT reported him arguing that the US approach "leaves too much latitude for financial institutions" and allows them to "circumvent globally agreed principles".The letter was revealed ahead of a meeting on Thursday between Geithner and Barnier, whose relationship has at times appeared strained.Ahead of the meeting, the US replied with its own thinly disguised criticism of Europe - Geithner's published schedule stated that Geithner and Barnier would discuss "the United States' intense focus on making certain that all key financial centers  live up to the G20's commitments on central clearing and trading of derivatives." This is an area where the US is seen to have legislated more aggressively than Europe."In addition, [Geithner] will underscore the U.S.'s continued commitment to implementing our Basel agreements rigorously and on the agreed timelines, and our firm expectation that others do the same," the schedule note said.The meeting itself reflected these positions. A weekend report in the Wall Street Journal quoted "people familiar with the meeting" as saying Geithner had told Barnier that Europe needed to impose tough "stress tests" on its banks and ensure they had stronger capital bases. Barnier reportedly repeated his criticisms of the US over Basel II and senior bankers' pay.Then, in a speech to the Brookings Institution on Friday, Barnier declared his concerns publicly, saying of the Basel rules: "Delay is not the answer. Europe is committed. We will deliver. And I call on the US to do the same."Meanwhile, another senior US regulator was signalling that US authorities want to take a tough line on so-called "systemically important financial institutions" (SIFIs), the biggest single remaining debate within the Basel Committee.In a speech in Washington, Federal Reserve Board governor Daniel Tarullo said SIFIs should generally be discouraged from substantial growth or mergers. He threw his weight behind a proposal for a graduated charge on SIFIs that "would vary precisely with the measure of a firm's systemic importance".There was "little if any research" to show that the largest firms needed their size to