diff --git a/spring-batch-core/.settings/com.springsource.sts.config.flow.prefs b/spring-batch-core/.settings/com.springsource.sts.config.flow.prefs
index 7fd2dae1e..f16242a6c 100644
--- a/spring-batch-core/.settings/com.springsource.sts.config.flow.prefs
+++ b/spring-batch-core/.settings/com.springsource.sts.config.flow.prefs
@@ -1,9 +1,10 @@
-#Wed May 04 11:15:42 BST 2011
+#Wed May 04 11:51:55 BST 2011
+//com.springsource.sts.config.flow.coordinates\:http\://www.springframework.org/schema/batch\:/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ChunkElementLateBindingParserTests-context.xml=<?xml version\="1.0" encoding\="UTF-8"?>\n<graph>\n<element clazz\="JobModelElement" type\="job">\n<structure end\="886" endstart\="880" start\="510" startend\="524"/>\n<bounds height\="168" width\="77" x\="15" y\="17"/>\n</element>\n</graph>
 //com.springsource.sts.config.flow.coordinates\:http\://www.springframework.org/schema/batch\:/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/JobExecutionListenerMethodAttributeParserTests-context.xml=<?xml version\="1.0" encoding\="UTF-8"?>\n<graph>\n<element type\="job">\n<structure end\="995" endstart\="989" start\="511" startend\="586"/>\n<bounds height\="118" width\="77" x\="15" y\="17"/>\n</element>\n</graph>
 //com.springsource.sts.config.flow.coordinates\:http\://www.springframework.org/schema/batch\:/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/JobRepositoryDefaultParserTests-context.xml=<?xml version\="1.0" encoding\="UTF-8"?>\n<graph/>
-//com.springsource.sts.config.flow.coordinates\:http\://www.springframework.org/schema/batch\:/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ParentRetryableLateBindingStepFactoryBeanParserTests-context.xml=<?xml version\="1.0" encoding\="UTF-8"?>\n<graph>\n<element clazz\="StepModelElement" type\="step">\n<structure end\="771" endstart\="764" start\="510" startend\="600"/>\n<bounds height\="34" width\="95" x\="106" y\="19"/>\n</element>\n<element clazz\="JobModelElement" type\="job">\n<structure end\="1011" endstart\="1005" start\="774" startend\="788"/>\n<bounds height\="128" width\="77" x\="15" y\="19"/>\n</element>\n</graph>
+//com.springsource.sts.config.flow.coordinates\:http\://www.springframework.org/schema/batch\:/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ParentRetryableLateBindingStepFactoryBeanParserTests-context.xml=<?xml version\="1.0" encoding\="UTF-8"?>\n<graph>\n<element clazz\="StepModelElement" type\="step">\n<structure end\="646" endstart\="639" start\="510" startend\="600"/>\n<bounds height\="34" width\="95" x\="106" y\="19"/>\n</element>\n<element clazz\="JobModelElement" type\="job">\n<structure end\="864" endstart\="858" start\="649" startend\="663"/>\n<bounds height\="128" width\="77" x\="15" y\="19"/>\n</element>\n</graph>
 //com.springsource.sts.config.flow.coordinates\:http\://www.springframework.org/schema/batch\:/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ParentRetryableStepFactoryBeanParserTests-context.xml=<?xml version\="1.0" encoding\="UTF-8"?>\n<graph>\n<element clazz\="StepModelElement" type\="step">\n<structure end\="700" endstart\="693" start\="439" startend\="529"/>\n<bounds height\="34" width\="95" x\="106" y\="19"/>\n</element>\n<element clazz\="JobModelElement" type\="job">\n<structure end\="955" endstart\="949" start\="703" startend\="769"/>\n<bounds height\="128" width\="77" x\="15" y\="19"/>\n</element>\n</graph>
-//com.springsource.sts.config.flow.coordinates\:http\://www.springframework.org/schema/batch\:/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ParentSkippableLateBindingStepFactoryBeanParserTests-context.xml=<?xml version\="1.0" encoding\="UTF-8"?>\n<graph>\n<element clazz\="StepModelElement" type\="step">\n<structure end\="771" endstart\="764" start\="510" startend\="600"/>\n<bounds height\="34" width\="95" x\="106" y\="19"/>\n</element>\n<element clazz\="JobModelElement" type\="job">\n<structure end\="1006" endstart\="1000" start\="774" startend\="788"/>\n<bounds height\="128" width\="77" x\="15" y\="19"/>\n</element>\n</graph>
+//com.springsource.sts.config.flow.coordinates\:http\://www.springframework.org/schema/batch\:/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ParentSkippableLateBindingStepFactoryBeanParserTests-context.xml=<?xml version\="1.0" encoding\="UTF-8"?>\n<graph>\n<element clazz\="StepModelElement" type\="step">\n<structure end\="771" endstart\="764" start\="510" startend\="600"/>\n<bounds height\="34" width\="95" x\="106" y\="19"/>\n</element>\n<element clazz\="JobModelElement" type\="job">\n<structure end\="987" endstart\="981" start\="774" startend\="788"/>\n<bounds height\="128" width\="77" x\="15" y\="19"/>\n</element>\n</graph>
 //com.springsource.sts.config.flow.coordinates\:http\://www.springframework.org/schema/batch\:/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ParentSkippableStepFactoryBeanParserTests-context.xml=<?xml version\="1.0" encoding\="UTF-8"?>\n<graph>\n<element clazz\="StepModelElement" type\="step">\n<structure end\="700" endstart\="693" start\="439" startend\="529"/>\n<bounds height\="34" width\="95" x\="106" y\="19"/>\n</element>\n<element clazz\="JobModelElement" type\="job">\n<structure end\="953" endstart\="947" start\="703" startend\="769"/>\n<bounds height\="128" width\="77" x\="15" y\="19"/>\n</element>\n</graph>
 //com.springsource.sts.config.flow.coordinates\:http\://www.springframework.org/schema/batch\:/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/PartitionStepParserTests-context.xml=<?xml version\="1.0" encoding\="UTF-8"?>\n<graph>\n<element clazz\="JobModelElement" type\="job">\n<structure end\="713" endstart\="707" start\="510" startend\="525"/>\n<bounds height\="128" width\="84" x\="15" y\="17"/>\n</element>\n<element clazz\="JobModelElement" type\="job">\n<structure end\="884" endstart\="878" start\="716" startend\="731"/>\n<bounds height\="172" width\="84" x\="207" y\="17"/>\n</element>\n<element clazz\="JobModelElement" type\="job">\n<structure end\="1042" endstart\="1036" start\="887" startend\="902"/>\n<bounds height\="128" width\="84" x\="111" y\="17"/>\n</element>\n<element clazz\="JobModelElement" type\="job">\n<structure end\="1295" endstart\="1289" start\="1045" startend\="1060"/>\n<bounds height\="128" width\="84" x\="303" y\="17"/>\n</element>\n<element clazz\="JobModelElement" type\="job">\n<structure end\="1412" endstart\="1406" start\="1298" startend\="1313"/>\n<bounds height\="128" width\="84" x\="399" y\="17"/>\n</element>\n</graph>
 //com.springsource.sts.config.flow.coordinates\:http\://www.springframework.org/schema/batch\:/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/StepListenerInStepParserTests-context.xml=<?xml version\="1.0" encoding\="UTF-8"?>\n<graph>\n<element clazz\="JobModelElement" type\="job">\n<structure end\="1832" endstart\="1826" start\="510" startend\="524"/>\n<bounds height\="268" width\="77" x\="15" y\="17"/>\n</element>\n</graph>
diff --git a/spring-batch-core/src/main/java/org/springframework/batch/core/configuration/xml/ChunkElementParser.java b/spring-batch-core/src/main/java/org/springframework/batch/core/configuration/xml/ChunkElementParser.java
index bc6b43a1c..547c05df0 100644
--- a/spring-batch-core/src/main/java/org/springframework/batch/core/configuration/xml/ChunkElementParser.java
+++ b/spring-batch-core/src/main/java/org/springframework/batch/core/configuration/xml/ChunkElementParser.java
@@ -19,9 +19,7 @@ import java.util.List;
 
 import org.springframework.batch.core.listener.StepListenerMetaData;
 import org.springframework.batch.core.step.item.ForceRollbackForWriteSkipException;
-import org.springframework.batch.core.step.skip.LimitCheckingItemSkipPolicy;
 import org.springframework.batch.repeat.policy.SimpleCompletionPolicy;
-import org.springframework.batch.retry.policy.SimpleRetryPolicy;
 import org.springframework.beans.MutablePropertyValues;
 import org.springframework.beans.factory.config.BeanDefinition;
 import org.springframework.beans.factory.config.BeanDefinitionHolder;
@@ -122,70 +120,32 @@ public class ChunkElementParser {
 
 		String skipLimit = element.getAttribute("skip-limit");
 		ManagedMap skippableExceptions = handleExceptionElement(element, parserContext, "skippable-exception-classes");
-		boolean hasSkipPolicy = false;
 		if (StringUtils.hasText(skipLimit)) {
-			if (skipLimit.startsWith("#")) {
-				if (skippableExceptions == null) {
-					parserContext.getReaderContext().error(
-							"The <chunk/> element must have skippable-exceptions if a skip-limit is specified.", element);
-				}
-				// It's a late binding expression, so we need step scope...
-				BeanDefinitionBuilder skipPolicy = BeanDefinitionBuilder
-						.genericBeanDefinition(LimitCheckingItemSkipPolicy.class);
-				skipPolicy.setScope("step");
-				skipPolicy.addPropertyValue("skippableExceptionMap", skippableExceptions);
-				skipPolicy.addPropertyValue("skipLimit", skipLimit);
-				propertyValues.addPropertyValue("skipPolicy", skipPolicy.getBeanDefinition());
-				hasSkipPolicy = true;
-			}
-			else {
-				if (skippableExceptions == null) {
-					skippableExceptions = new ManagedMap();
-					skippableExceptions.setMergeEnabled(true);
-				}
-				propertyValues.addPropertyValue("skipLimit", skipLimit);
+			if (skippableExceptions == null) {
+				skippableExceptions = new ManagedMap();
+				skippableExceptions.setMergeEnabled(true);
 			}
+			propertyValues.addPropertyValue("skipLimit", skipLimit);
 		}
-		if (!hasSkipPolicy) {
-			// Even if there is no retryLimit, we can still accept exception
-			// classes for an abstract parent bean definition
-			propertyValues.addPropertyValue("skippableExceptionClasses", skippableExceptions);
-		}
+		// Even if there is no retryLimit, we can still accept exception
+		// classes for an abstract parent bean definition
+		propertyValues.addPropertyValue("skippableExceptionClasses", skippableExceptions);
 
 		handleItemHandler("skip-policy", "skipPolicy", null, false, element, parserContext, propertyValues,
 				underspecified);
 
 		String retryLimit = element.getAttribute("retry-limit");
 		ManagedMap retryableExceptions = handleExceptionElement(element, parserContext, "retryable-exception-classes");
-		boolean hasRetryPolicy = false;
 		if (StringUtils.hasText(retryLimit)) {
-			if (retryLimit.startsWith("#")) {
-				if (retryableExceptions == null) {
-					parserContext.getReaderContext().error(
-							"The <chunk/> element must have retryable-exceptions if a retry-limit is specified.", element);
-				}
-				// It's a late binding expression, so we need step scope...
-				BeanDefinitionBuilder retryPolicy = BeanDefinitionBuilder
-						.genericBeanDefinition(SimpleRetryPolicy.class);
-				retryPolicy.setScope("step");
-				retryPolicy.addPropertyValue("maxAttempts", retryLimit);
-				retryPolicy.addPropertyValue("retryableExceptions", retryableExceptions);
-				propertyValues.addPropertyValue("retryPolicy", retryPolicy.getBeanDefinition());
-				hasRetryPolicy = true;
-			}
-			else {
-				if (retryableExceptions == null) {
-					retryableExceptions = new ManagedMap();
-					retryableExceptions.setMergeEnabled(true);
-				}
-				propertyValues.addPropertyValue("retryLimit", retryLimit);
+			if (retryableExceptions == null) {
+				retryableExceptions = new ManagedMap();
+				retryableExceptions.setMergeEnabled(true);
 			}
+			propertyValues.addPropertyValue("retryLimit", retryLimit);
 		}
-		if (!hasRetryPolicy) {
-			// Even if there is no retryLimit, we can still accept exception
-			// classes for an abstract parent bean definition
-			propertyValues.addPropertyValue("retryableExceptionClasses", retryableExceptions);
-		}
+		// Even if there is no retryLimit, we can still accept exception
+		// classes for an abstract parent bean definition
+		propertyValues.addPropertyValue("retryableExceptionClasses", retryableExceptions);
 
 		handleItemHandler("retry-policy", "retryPolicy", null, false, element, parserContext, propertyValues,
 				underspecified);
diff --git a/spring-batch-core/src/test/java/org/springframework/batch/core/configuration/xml/ParentStepFactoryBeanParserTests.java b/spring-batch-core/src/test/java/org/springframework/batch/core/configuration/xml/ParentStepFactoryBeanParserTests.java
index c0d1cc961..648628a7b 100644
--- a/spring-batch-core/src/test/java/org/springframework/batch/core/configuration/xml/ParentStepFactoryBeanParserTests.java
+++ b/spring-batch-core/src/test/java/org/springframework/batch/core/configuration/xml/ParentStepFactoryBeanParserTests.java
@@ -18,7 +18,6 @@ package org.springframework.batch.core.configuration.xml;
 import static org.junit.Assert.assertNotNull;
 import static org.junit.Assert.assertTrue;
 
-import org.junit.Ignore;
 import org.junit.Test;
 import org.springframework.batch.core.Step;
 import org.springframework.batch.core.step.item.FaultTolerantChunkProcessor;
@@ -40,7 +39,7 @@ public class ParentStepFactoryBeanParserTests {
 		assertNotNull("Step not parsed", step);
 		Object tasklet = ReflectionTestUtils.getField(step, "tasklet");
 		Object chunkProcessor = ReflectionTestUtils.getField(tasklet, "chunkProcessor");
-		assertTrue("Wrong processor type", chunkProcessor instanceof FaultTolerantChunkProcessor<?,?>);
+		assertTrue("Wrong processor type", chunkProcessor instanceof FaultTolerantChunkProcessor<?, ?>);
 	}
 
 	@Test
@@ -51,7 +50,7 @@ public class ParentStepFactoryBeanParserTests {
 		assertNotNull("Step not parsed", step);
 		Object tasklet = ReflectionTestUtils.getField(step, "tasklet");
 		Object chunkProcessor = ReflectionTestUtils.getField(tasklet, "chunkProcessor");
-		assertTrue("Wrong processor type", chunkProcessor instanceof FaultTolerantChunkProcessor<?,?>);
+		assertTrue("Wrong processor type", chunkProcessor instanceof FaultTolerantChunkProcessor<?, ?>);
 	}
 
 	@Test
@@ -62,11 +61,11 @@ public class ParentStepFactoryBeanParserTests {
 		assertNotNull("Step not parsed", step);
 		Object tasklet = ReflectionTestUtils.getField(step, "tasklet");
 		Object chunkProcessor = ReflectionTestUtils.getField(tasklet, "chunkProcessor");
-		assertTrue("Wrong processor type", chunkProcessor instanceof FaultTolerantChunkProcessor<?,?>);
+		assertTrue("Wrong processor type", chunkProcessor instanceof FaultTolerantChunkProcessor<?, ?>);
 	}
 
+	// BATCH-1396
 	@Test
-	@Ignore // Fix this BATCH-1739
 	public void testRetryableLateBindingAttributes() throws Exception {
 		ConfigurableApplicationContext context = new ClassPathXmlApplicationContext(
 				"org/springframework/batch/core/configuration/xml/ParentRetryableLateBindingStepFactoryBeanParserTests-context.xml");
@@ -74,11 +73,11 @@ public class ParentStepFactoryBeanParserTests {
 		assertNotNull("Step not parsed", step);
 		Object tasklet = ReflectionTestUtils.getField(step, "tasklet");
 		Object chunkProcessor = ReflectionTestUtils.getField(tasklet, "chunkProcessor");
-		assertTrue("Wrong processor type", chunkProcessor instanceof FaultTolerantChunkProcessor<?,?>);
+		assertTrue("Wrong processor type", chunkProcessor instanceof FaultTolerantChunkProcessor<?, ?>);
 	}
 
+	// BATCH-1396
 	@Test
-	@Ignore // Fix this BATCH-1739
 	public void testSkippableLateBindingAttributes() throws Exception {
 		ConfigurableApplicationContext context = new ClassPathXmlApplicationContext(
 				"org/springframework/batch/core/configuration/xml/ParentSkippableLateBindingStepFactoryBeanParserTests-context.xml");
@@ -86,7 +85,7 @@ public class ParentStepFactoryBeanParserTests {
 		assertNotNull("Step not parsed", step);
 		Object tasklet = ReflectionTestUtils.getField(step, "tasklet");
 		Object chunkProcessor = ReflectionTestUtils.getField(tasklet, "chunkProcessor");
-		assertTrue("Wrong processor type", chunkProcessor instanceof FaultTolerantChunkProcessor<?,?>);
+		assertTrue("Wrong processor type", chunkProcessor instanceof FaultTolerantChunkProcessor<?, ?>);
 	}
 
 }
diff --git a/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ChunkElementLateBindingParserTests-context.xml b/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ChunkElementLateBindingParserTests-context.xml
index a5facdb82..207bec09d 100644
--- a/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ChunkElementLateBindingParserTests-context.xml
+++ b/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ChunkElementLateBindingParserTests-context.xml
@@ -14,14 +14,19 @@
 		</step>
 		<step id="s2">
 			<tasklet>
-				<chunk reader="reader" writer="writer" processor="processor" commit-interval="1"
-					retry-limit="#{jobParameters['retry.interval']}">
-					<retryable-exception-classes>
-						<include class="java.lang.Exception" />
-					</retryable-exception-classes>
-				</chunk>
+				<chunk reader="reader" writer="writer" processor="processor" commit-interval="1" retry-policy="retryPolicy"/>
 			</tasklet>
 		</step>
 	</job>
 
+	<bean id="retryPolicy" class="org.springframework.batch.retry.policy.SimpleRetryPolicy" xmlns="http://www.springframework.org/schema/beans"
+		scope="step">
+		<property name="maxAttempts" value="#{jobParameters['retry.interval']}" />
+		<property name="retryableExceptions">
+			<map key-type="java.lang.Class">
+				<entry key="java.lang.Exception" value="true" />
+			</map>
+		</property>
+	</bean>
+
 </beans:beans>
\ No newline at end of file
diff --git a/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ParentRetryableLateBindingStepFactoryBeanParserTests-context.xml b/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ParentRetryableLateBindingStepFactoryBeanParserTests-context.xml
index dedc7f117..db949c000 100644
--- a/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ParentRetryableLateBindingStepFactoryBeanParserTests-context.xml
+++ b/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ParentRetryableLateBindingStepFactoryBeanParserTests-context.xml
@@ -8,11 +8,7 @@
 
 	<step id="stepParent" abstract="true" xmlns="http://www.springframework.org/schema/batch">
 		<tasklet>
-			<chunk>
-				<retryable-exception-classes>
-					<include class="java.lang.Exception" />
-				</retryable-exception-classes>
-			</chunk>
+			<chunk/>
 		</tasklet>
 	</step>
 
@@ -20,9 +16,19 @@
 		<step id="s1" parent="stepParent">
 			<tasklet>
 				<chunk reader="reader" writer="writer" processor="processor" commit-interval="1"
-					retry-limit="#{jobParameters['retry.interval']}"/>
+					retry-policy="retryPolicy"/>
 			</tasklet>
 		</step>
 	</job>
 
+	<bean id="retryPolicy" class="org.springframework.batch.retry.policy.SimpleRetryPolicy" xmlns="http://www.springframework.org/schema/beans"
+		scope="step">
+		<property name="maxAttempts" value="#{jobParameters['retry.interval']}" />
+		<property name="retryableExceptions">
+			<map key-type="java.lang.Class">
+				<entry key="java.lang.Exception" value="true" />
+			</map>
+		</property>
+	</bean>
+
 </beans:beans>
\ No newline at end of file
diff --git a/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ParentSkippableLateBindingStepFactoryBeanParserTests-context.xml b/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ParentSkippableLateBindingStepFactoryBeanParserTests-context.xml
index 90e264ff1..8c079ed2d 100644
--- a/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ParentSkippableLateBindingStepFactoryBeanParserTests-context.xml
+++ b/spring-batch-core/src/test/resources/org/springframework/batch/core/configuration/xml/ParentSkippableLateBindingStepFactoryBeanParserTests-context.xml
@@ -20,9 +20,19 @@
 		<step id="s1" parent="stepParent">
 			<tasklet>
 				<chunk reader="reader" writer="writer" processor="processor" commit-interval="1"
-					skip-limit="#{jobParameters['skip.limit']}"/>
+					skip-policy="skipPolicy"/>
 			</tasklet>
 		</step>
 	</job>
 
+	<bean id="skipPolicy" class="org.springframework.batch.core.step.skip.LimitCheckingItemSkipPolicy" xmlns="http://www.springframework.org/schema/beans"
+		scope="step">
+		<property name="skipLimit" value="#{jobParameters['skip.limit']}" />
+		<property name="skippableExceptionMap">
+			<map key-type="java.lang.Class">
+				<entry key="java.lang.Exception" value="true" />
+			</map>
+		</property>
+	</bean>
+
 </beans:beans>
\ No newline at end of file