Australia's Big Four banks are to be defined as "systemically important financial institutions" or SIFIs under new rules released last Friday. The rules are designed to keep the financial system stable, while minimising the need for expensive taxpayer bail-outs.The new rules, from global regulator the Financial Stability Board, require tougher global supervision of SIFIs. The rules are not expected to affect APRA's oversight of Australian banking, because APRA's regime is already regarded as tough by world standards. But they do complicate the post-2010 regulatory landscape.The new rules were published on Friday and endorsed by the G20 leaders' meeting in Seoul before it concluded.The FSB rules stipulate that SIFIs must eventually have "additional loss absorption capacity beyond the Basel III standards".This will require the Australian Prudential Regulation Authority to develop a framework for dealing with local SIFIs. The framework is currently expected to go no further than measures APRA already has in place, but its precise extent has not yet been defined.The Big Four banks are all expected to be defined as SIFIs; it is unclear whether Macquarie Bank will also be included. It is also possible that SIFIs could include non-banks, such as insurers.However, the immediate impact of the FSB's new global rules will be on a much smaller group of "global systemically important financial institutions" or G-SIFIs, including such supra-national financiers as UBS, Citigroup and Royal Bank of Scotland. For these institutions the new rules may have far-reaching implications.This special class of SIFIs will be the classic "too-big-to-fail" global institutions. They will include many institutions which were bailed out by governments during the global financial crisis. The FSB defines them as "firms whose disorderly failure, because of their size, complexity and systemic interconnectedness, would cause significant disruption to the wider financial system and economic activity."FSB chairman Mario Draghi, the governor of the Bank of Italy, is reported to have told the G20 leaders he would finalise the full list of G-SIFIs by mid-2011. The FSB and the Basel Committee on Banking Supervision will reportedly then decide, by the end of 2011, on extra measures to boost the G-SIFIs' capacity to absorb losses. The tougher rules could include higher capital requirements than for other institutions.The burden of these rules could be such as to force some of these institutions to consider breaking themselves up.But the list of G-SIFIs will not include any Australian institutions.The principals to be applied to local SIFIs are not currently well defined but are expected to along the lines of guidelines APRA already applies. The rules will also give local supervisors broad discretion on their application.