World leaders agreed on Sunday to take separate paths toward shared goals of lasting growth and safer banks as two years of global crisis give way to a fragile economic recovery.

Balance was the buzz word. The Group of 20 pledged to halve budget deficits by 2013 without stunting growth, and clamp down on risky bank behavior without choking off lending.

But they left room for countries to move at their own pace and adopt differentiated and tailored policies that match national economic or political priorities, a sharp reversal from the unity of the previous three crisis-era G20 summits.

The G20's highest priority is to safeguard and strengthen the recovery and lay the foundation for strong, sustainable and balanced growth, and strengthen our financial systems against risks, the group said in a statement released at the end of meetings here.

The G20 allowed each country space to decide how to proceed with controversial provisions such as taxing banks to recoup bailout costs and implementing tougher bank capital rules. It also steered clear of confrontation with China by making no specific mention of the yuan currency.

The G20, which includes emerging economic powers as well as the developed economies, which is where the economic trouble started, united last year to throw trillions of dollars into the battle against recession.

But that unity has begun to fray as countries emerge from crisis at different speeds and with different policy needs. Emerging Asian economies such as China have come roaring back while the U.S. recovery remains tepid and Europe lags behind.

Now that the worst of the crisis is past, the dewy-eyed vision of G20 countries pulling together to solve global economic problems is steadily giving way to a more pragmatic approach of merging competing perspectives and agendas to fashion imperfect compromises and make incremental progress, said Eswar Prasad, a senior fellow at the Brookings Institution and a former International Monetary Fund official.

(Reporting by Reuters G20 team; Writing by Emily Kaiser; Editing by David Storey and Janet Guttsman)

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