Australian bankers hoping for some support from the Basel Committee on Banking Supervision in their fight with the Australian Prudential Regulation Authority over what they argue is APRA's overly conservative treatment of capital are out of luck.The Basel Committee's regulatory consistency assessment program team has published an assessment of APRA's implementation of Basel III. The team noted "the more rigorous implementation of the framework when it came to the definition and measurement of capital" but made no comment on the matter.Australian prudential regulations covering capital go beyond the minimum Basel requirements in a number of areas:•    Basel requires exposures classified as intangible assets under International Financial Reporting Standards to be deducted from common equity tier one capital. APRA requires that, in addition to these exposures, capitalised expenses, capitalised transaction costs, mortgage servicing rights and other items be deducted from CET1 capital.•    Basel requires that banks deduct investments in their own shares from CET1 capital. APRA requires, in addition, the deduction of any unused portion of any trading limits in own shares that have been agreed with APRA.•    Basel requires that reciprocal cross-holdings in the capital of banking, financial and insurance entities be deducted from CET1 capital. APRA requires the full deduction of all holdings of capital of banking, financial and insurance entities, regardless of whether they are reciprocal.•    Basel does not require the deduction of the aggregate amount of investments in the capital of banking, financial and insurance entities in which the bank owns less than 10 per cent of the issued share capital of entity and where this aggregate amount is less than 10 per cent of the bank's adjusted CET1 capital. APRA requires the full amount of such investments to be deducted from CET1 capital.The Basel Committee's review looked at the consistency of regulations in Australia with the Basel framework and their completeness.Australian prudential regulation was found to be compliant with 12 of the 14 components assessed by the regulatory consistency assessment program team. Two components - definition of capital and internal ratings-based approach to credit risk -  were rated "largely compliant".The largely compliant rating for the treatment of capital results from APRA's treatment of investments in an ADI's own capital. In particular, "APRA allows certain exemptions to the Basel-required deduction for investments in own-capital instruments that might be interpreted fairly widely by institutions."Another finding that affected the rating for treatment of capital concerned the treatment of non-viability contingent capital instruments. APRA's standard does not guarantee that the issuance of any new shares would occur prior to any public sector injection of capital, and instead relies on APRA's ability to trigger conversion prior to such an injection.The largely compliant rating for treatment of internal ratings-based credit risk was due to the fact that APRA allowed banks to treat mortgages the same, regardless of whether they were for investors or owner-occupiers.