International standards are no longer an optional extra, especially for a major capital importer like Australia, David Murray told the National Press Club yesterday."International standard setters and the decisions of foreign regulators have a much greater influence on our regulatory settings now than they did in 1997," Murray said.His panel counted the cost of the recent crisis."The financial crisis has changed the way we think about vulnerabilities," he said."By that I mean that the financial crisis highlighted the long-term economic damage that is caused by banking crises, including their impact on household wealth."In Australia, the financial crisis produced a sharp fall in economic growth and an increase of nearly two percentage points in the unemployment rate.Overseas, the impact was much more severe. Reinhart and Rogoff suggest that the average cost of a banking crisis is a decline in real GDP per person of 9 per cent and a 7 percentage point increase in unemployment. "The equivalent impact on the Australian economy today would be approximately 860,000 more people out of work, and a decline in real GDP of approximately $6000 per person.""Australia's best interest will be attained with a system in which we have confidence," he said.Attacks on APRA rejectedThe importance of confidence in the Australian banks financial system is cited in the report (at page 1-18) as an important reason to implement global standards.The report rejects claims by major banks and others that APRA is implementing these standards to quickly and tightly. Instead it says Australian bank capital ratios are broadly in line with overseas peers. APRA has been more conservative than the global average in some areas, but less conservative in others, it says.It argues that Australia's strong prudential supervision helped the country weather the global financial crisis. (Click for more of the report's views on prudential supervision.)Big banks could need more capitalTacking yet another layer of capital on banks is one option raised by Murray's panel.The panel wants views on whether Australia should "further increase capital requirements on the financial institutions considered to be systemically important domestically".This is one remedy for the 'too big to fail' problem. Murray suggests the perceptions cannot be erased but may be moderated by making it more credible that bank failures can be resolved without taxpayer funds.The bank resolution mechanism is supposed to play out first, he told the Press Club.Australia faces up to its debt to the worldAs at the end of March 2014, Australia's gross foreign liabilities were A$2.5 trillion at the end of March 2014, two-thirds of it debt.Making good on these debts is one underlying concern of the interim report of Financial System inquiry.Perennial concerns over productivity and ageing were expected themes, but Murray also got on the front foot over crises.Future financial crises lead concern of Murray panelBanks are in trouble in Portugal, they are going broke in Bulgaria, while another shelters, bruised, in Australia.In this state David Murray, a former Commonwealth Bank boss, yesterday walked on stage to produce the interim report of his banking and