New Zealand is set to join Australia in accelerating its implementation of Basel III - but with some distinctive local variations.In particular, the Reserve Bank of New Zealand does not plan to implement Basel III's leverage ratio, the simple rule designed to act as a backstop to more sophisticated capital measures.The RBNZ released a consultation paper yesterday on implementing Basel III. In it, the RBNZ said it would implement Basel III capital measures from 1 January 2013, "unless there are compelling reasons for a phased approach".RBNZ deputy governor Grant Spencer said in a media release that the bank proposed to adopt most of the Basel III standards, "except for those that are less conservative than already in place, or that are not suited to New Zealand circumstances".The Basel III rules will leave unchanged the simple minimum capital requirements for NZ's 21 banks. But it will raise the Tier 1 capital requirement from four to six per cent and toughen the criteria for both Tier 1 and Tier 2 capital.The RBNZ also plans to adopt 10 of 13 Basel III "regulatory adjustments" to capital.However, it has rejected the leverage ratio as a "one-size-fits-all" approach which is "poorly targeted" and would "undermine the value of the existing risk-based approach". The Australian Prudential Regulatory Authority, in contrast, plans to implement the leverage ratio according to the Basel III schedule in 2018.The leverage ratio aside, the changes appear to keep Australian and NZ standards closely in line, important given that the largest NZ banks are controlled from Australia.Like Australian authorities, the RBNZ argues NZ banks are well-capitalised and hence well-placed to move to Basel III standards ahead of the international deadlines set last year. Westpac NZ CEO George Frazis said last week that New Zealand banks were "pretty much there already", according to interest.co.nz.The RBNZ's proposals for rapid implementation may not please the CEO of NZ's largest bank, ANZ's Mike Smith. Smith has already criticised APRA's accelerated timetable for Basel III implementation as moving ahead of the rest of the world, a claim APRA has rejected. (Canada and Singapore have also signalled accelerated timetables.)The RBNZ's rejection of the leverage ratio suggests a willingness to move further away from the Basel III blueprint than Australia, however.The RBNZ also says it plans to consult separately on restrictions applying to banks operating inside the Basel III conservation buffer and on the countercyclical buffer and counterparty credit risk requirements. The RBNZ has well publicised doubts about the value of macro-prudential tools such as the countercyclical buffer.