Comment: A bank capital explosion

The fast work by ANZ to jostle to the front of the bank capital sales queue is a symptom of an overpowering drive in the industry at present.

The David Murray version of banks' capital requirements is already effectively Australian government policy and there is a very real prospect that APRA will soon stipulate minimum capital levels echoing the Financial System Inquiry's stance.

The Financial System Inquiry recommended that "although Australian ADIs are generally well capitalised, further strengthening would assist in ensuring capital levels are, and are seen to be, unquestionably strong."

It recommended a baseline target in the top quartile of internationally active banks and said that, on the available evidence, Australia's major banks' capital ratios were in the second quartile.

Capital can be generated organically or it can be sucked from the market - the latter, evidently, an attractive option.

It may be hybrids now but equity placements - in volume - must be a theme of 2015.

Most of Australia's largest banks can attach a strategic rationale to a major equity raising and all four must be contemplating M&A; with luck some intriguing names, perhaps IT shops or supposed disruptors.

Banks, like many ASX listed companies, face no real limit to their capacity to place financial securities with fund managers.

Passive index followers among the fundies must hold the correct share of securities sold by all large firms.

Many other funds in practice track the index and must hold all the securities offered.

So reaching the Murray capital target is one board vote away for any bank.