The capital rules set by the Basel Committee on Banking Supervision in Switzerland is not much of a worry for the Australian banking industry. The fear, however, lies with domestic regulations.

Australian Banking Association chief executive Steven Munchenberg said, “A globally consistent approach is important and implied in that is that we don't think there is a case for the Australian Prudential Regulation Authority (APRA) exceeding the standards in terms of the ratios.”

The "tier one" capital, for one, will have a minimum of six percent from the existing four percent. Basel III will also impose an additional 2.5 percent "conservation" buffer to ensure banks do not breach their minimum. Restrictions on dividends and bonus payments come in when banks get into the buffer zone.

According to KPMG banking partner Paul Lichtenstein, “The Basel requirements are guidelines for international regulators, but it is up to APRA to determine what they will implement and how they go about it.”

Under the current regulatory regime, the APRA requires additional bank capital to allow for a particular risk profile.

Basel III will also require banks to raise their common equity from the current two percent to seven percent of assets. The banks have until 2019 to make up for any gap. Commonwealth Bank treasurer Lyn Cobley said, “The transition periods are very workable, although keep in mind the national regulator has the discretion to adopt their own set of rules and their own transition periods.”

Southern Cross Equities banking analyst TS Lim said Australia's four pillars (Commonwealth Bank of Australia, National Australia Bank, Westpac Banking Corporation, and the ANZ Banking Group) would remain unaffected by the new rules because they had operated within those restrictions for years.