Minimum capital ratios for banks in New Zealand may be steered toward a percentage into the teens, a high minimum target by global standards.The Reserve Bank of New Zealand yesterday said it is undertaking "a comprehensive review" of the capital adequacy framework applying to locally incorporated registered banks over 2017/18. The aim of the review, it said, "is to identify the most appropriate framework for setting capital requirements for New Zealand banks, taking into account how the current framework has operated and international developments in bank capital requirements."In an Issues Paper, the central bank then set out themes for the review that suggest a leaning towards an idiosyncratic approach."In the more mainstream studies the Reserve Bank has considered so far a typical optimal [capital] ratio is about 14 per cent, but estimates do vary widely (the range is roughly five per cent to 17 per cent). "The Reserve Bank will continue to review and assess these studies, but also welcomes the views of submitters on this issue. "At this early stage of the review the Reserve Bank has not yet formed a view on the final calibration of capital requirements, but it is likely that the Reserve Bank will take into account the studies it has seen, as well as empirical evidence."The issue paper observed that "a growing number of academics … as well as some regulators, have argued that the costs to society as a whole of higher capital are very low and that capital requirements should be much higher than they are now."The capital adequacy ratios of New Zealand's four largest banks the RBNZ at its website stated as ranging from 12.9 per cent to 14.3 per cent.