The Reserve Bank of New Zealand has reinforced its commitment to increasing bank capital requirements, and emphasised that levelling the playing field between locally-owned banks and the Australian-owned Big Four is one of the aims.In a speech at Victoria University yesterday, RBNZ deputy governor Geoff Bascand said the fact that the Big Four have been able to use their own internal models for capital ratios "provides them with a competitive advantage that we don't think can be fully justified based on a difference in their underlying risk profiles"."We are proposing to limit this gap by capping the reduction in capital that banks using their own internal models can achieve relative to all other banks."If the proposed changes come into force, ANZ, ASB, BNZ and Westpac will have to increase their assets used to determine the minimum amount of regulatory capital they hold from around 76 per cent of what other NZ banks require, to 90 per cent.The main thrust of the proposals is an increase in the minimum capital ratio for NZ banks from 10.5 per cent of their risk weighted assets to 18 per cent for "systemically important" banks (ANZ, ASB, BNZ and Westpac) and 17 per cent for all other banks. The deadline for submissions on the proposals is May 3.