John Watson, principal consultant at Margate Financial Research Solutions asks: do the major banks need to change their reporting of international capital comparisons? In a significant development on reporting of capital ratio comparisons, both David Murray, chairman of the FSI and Wayne Byers, chairman of APRA, have come out in the last week and cast doubt on the major bank claims that, when compared to international peers, they actually have higher capital ratios than they report under APRA's supervision. In May of this year Morgij Analytics and John Watson of Margate Financial Research Solutions released their research findings on the validity of Australia's major banks reporting to investors that their capital, when compared to international counterparts, is significantly higher than what's reported under APRA's mandated capital calculations. The impact of these calculations is to imply the major banks are carrying more capital than is required by international lawmakers and gives the impression that APRA's requirements are far harsher than those of other regulators. In their investor presentations the majors portray capital harmonisation as a straightforward calculation process that simply assumes that other jurisdictions only require minimum standards and makes no allowances for IRB model variations, differences in definition of capital, allowable deductions etc. Indeed, the majors typically assert in their investor presentations that when comparing their capital ratios to overseas banks, investors should make an upward adjustment of between 182 basis points and 290 bps in order to harmonise capital ratios calculated under APRA requirements to Basel Committee on Bank Regulation "Basel III" minimum requirements - refer to the comparison table below. When Morgij Analytics released its research findings that Australia's major banks were quoting an uplift in capital that was unsupported by the evidence, the research was derided by one of them as nothing more than "flawed marketing." The only evidence cited by the Big Four as validating their capital harmonisation methodologies is a two page Australian Bankers' Association Fact Sheet released in December 2012. On 15 July 2015, the Financial System Inquiry Interim Report was released and in a speech at the National Press Club, David Murray dispelled the myth that the Majors have far healthier capital positions than their international peers by noting that the Majors are wrong to portray their capital "as out in front" and that when compared to global peers the true picture is that "they are in the middle of the pack." On 18 July this year, in a speech to the House of Representatives Standing Committee on Economics Canberra, the APRA Chairman Wayne Byres stated:  "It is often said that APRA is 'tough', because we sometimes impose requirements faster or stronger than the Basel standards … let me make two points up front: first, Basel standards are minimum requirements and it is quite common for jurisdictions to apply more stringent standards in