Australia's banking watchdog publishes long-awaited capital rules

Following four years of consultation, the new Basel III-aligned set of standards change the models used by banks to work out how much capital they need to hold, and will come into effect in 2023

Australia's banking regulator published on Monday a final set of rules asking banks to hold more capital against investor and interest-only home loans but less for business loans, in a move expected to affect loan pricing. 

Following four years of consultation, the new Basel III-aligned set of standards change the models used by banks to work out how much capital they need to hold, and will come into effect in January 2023. 

It will not require banks to raise more capital. 

Instead, the current requirement imposed on Australia's four largest lenders to maintain core capital above the minimum benchmark of 10.5% to be