Major banks in Australia may be made subject to a regime that formalises additional layers of regulation for "domestic, systemically important banks" - known as D-SIBS - from 2016. The Basel Committee on Banking Supervision published a final paper on Friday on the "principles on the assessment… and the higher loss absorbency requirement for D-SIBs"."Higher loss absorbency" is jargon for capital.The point of the paper is the manner in which one regulatory agency - the Basel Committee - will monitor the work of other regulators, such as the Australian Prudential Regulation Authority and the Reserve Bank of New Zealand.In the case of APRA, the local banking regulator has hinted that it is not inclined to impose yet another capital target on ANZ, CBA, NAB and Westpac. Instead, APRA may argue that its existing (though unpublished) target capital ratios for each bank already deals with the issues that are the subject of the Basel Committee paper. On the other hand, the latest paper emphasises that "the degree of concentration in the banking sector or the size of the banking sector relative to GDP" is a factor in the assessment of how much more capital D-SIBs might require.This aspect of the guidelines is especially applicable in Australia, given that major banks comprise four of the five largest companies by market capitalisation.The Basel Committee wrote that "countries that have a larger banking sector relative to GDP are more likely to suffer larger direct economic impacts of the failure of a D-SIB than those with smaller banking sectors.""While size-to-GDP is easy to calculate, the concentration of the banking sector could also be considered."A failure in a medium-sized highly concentrated banking sector would likely create more of an impact on the domestic economy than if it were to occur in a larger, more widely dispersed banking sector."Last month, the International Monetary Fund also recommended that "authorities [in Australia] continue to emphasise intensive bank supervision and introduce higher loss absorbency for systemically important banks."One brake on this approach is the re-thinking of the timing of new banking regulations in Europe.On Thursday, Bloomberg reported that the European Commission was pushing for a deferral on the tighter liquidity rules - rather than the capital rules - that are one feature of the transition to Basel III regulatory principles.AdvisorOne, a US financial publisher, reported on Friday that the start date for the Basel III capital rules in Europe could be pushed back by a year.