One topic that the dreamier followers of banks would like clear guidance on from banks at the moment is their capital management. They are unlikely to receive much.Banks, just like their corporate customers, have raised as much capital as they can plausibly extract from investors over the last year. Regulators are also demanding higher capital ratios and, offshore at least, are threatening to demand to make them higher still.In the case of NAB, the core capital base is $8 billion more at the end of September 2009 than a year before, a rise of more than 50 per cent.This has lifted NAB's tier one capital ratio to a shade less than nine per cent, up from 7.35 per cent a year ago when the financial crisis was still young.On the alternative measure that Australian banks like to cite - the capital ratio calculated under the FSA rules that apply in Britain - NAB estimates its tier one ratio would be 11.3 per cent.Yet the concept of "tier one" capital, which treats some debt as equity, may be a victim of the crisis.Plans for replacement measures remain under debate but centre on genuine shareholders' funds as the most relevant capital to measure.So in that context Cameron Clyne, NAB's CEO, kept projections on capital pretty vague."Balance sheet strength is still what we're going to run the business to, we're not optimising it for earnings, we're optimising it to balance sheet strength. "That means elevated levels of liquidity, possibly even enhanced levels of liquidity. We'll stay strong on capital, but when the dust settles around the regulatory debate, we would hope that there's move … there's room to begin to grow into that capital base, and if the ratio's lower, but not bold enough to make a prediction on that front at this stage."Mark Joiner, chief financial officer of the bank, speaking earlier in the briefing said: "We're not saying that nine is the new eight, we do actually … we can already see certain headwinds to capital."For example there is the expectation that the industry will move to reinstate the general reserve for credit losses which will probably cost us 10 to 12 basis points of capital."There is a wider and very fundamental regulatory debate about what should count as capital, what should be deductions and what is an appropriate level of capital, as well as the prospect of an increased focus on a general leverage ratio. "So we think that it's better to be strong on capital until the dust settles on all those things, and it's easier to move from the strong position to the new standard than it is to move from a weak position to the new standard."Responding later to a question on the topic, Joiner said: "I'm not going to predict where the debate is going to come out on tier one versus core. "I think it's certainly true to say that some of the tier two instruments didn't perform particularly well during the crisis and so