By Walden Siew

NEW YORK (Reuters) - Plans by the Group of Seven leading industrial nations to avert future global financial market crises, announced on Friday, don't have the teeth to force immediate change at banks.

The recommendations, however, may be a blueprint for a coming struggle that pits top banking regulators against industry giants such as Deutsche Bank AG (DBKGn.DE: Quote, Profile, Research), Citigroup (C.N: Quote, Profile, Research) and Morgan Stanley (MS.N: Quote, Profile, Research).

Policy-makers from the G7 nations met on Friday in Washington D.C. and announced wide-ranging recommendations for more bank regulation, enhanced bank capital requirements, and risk management tools, based on a report by a group of international regulators, the Financial Stability Forum.

While widely praised, all the advice is voluntary and comes at a time when banks' earnings and capital bases are being squeezed by the meltdown in the U.S. housing market, meaning they are unlikely to comply with additional requests.

Moreover, banks are already writing down the value of their riskiest assets and the current U.S. administration is averse to more regulation of the capital markets.

"We are not fools," Nout Wellink, head of the Basel Committee on Banking Supervision, told Reuters on Sunday. "We do realize there are better moments to introduce substantial increases in capital requirements."

While banks may resist calls to raise regulatory capital requirements, banking regulators "will go further in certain respects whether they like it or not," Wellink said.

For banks, the call for better capitalization and standardized valuation of structured debt comes after more than $200 billion in write downs of those assets thanks to the U.S. subprime mortgage market crisis.