Australia's big four banks could yet face tougher standards than smaller local rivals under the new Basel III regulatory regime announced on Sunday.Sunday's announcement confirmed that Australian banks should easily meet most of the new requirements. The one well-known exception involves the liquidity ratio, which Australian institutions will struggle to meet because of an expected shortage of government debt - an issue the Basel Committee has flagged it will resolve (see here).But Sunday's announcement also confirmed that the Basel Committee and the Financial Stability Board are still working on the treatment of "systemically important banks".These banks, the announcement said, "should have loss-absorbing capacity beyond the standards announced today and work continues on this issue." The systemically important banks could attract capital surcharges, contingent capital and/or "bail-in debt", the announcement said.The measures are intended to impose a cost on banks that regulators would be forced to protect in a crisis because they are "too big to fail".The announcement did not clearly define the term "systemically important", or provide a timeframe for the work on additional requirements for these systemically important banks.The term could eventually be defined to include only globally important banks, such as UBS and Citibank.But an alternative definition would include all banks that are systemically important to a national or regional market. This could include regionally significant banks such as Nordic banking power Handelsbanken, or even Australia's Westpac, CBA, NAB and ANZ.Paul Lichtenstein, KPMG's Partner, Financial Risk Management, said yesterday the issue was "a sleeper issue in that [the definition] is somewhat unknown". There was no doubt that the definition would be one of the issues on the Basel Committee's agenda, he said.He also noted that if the Big Four were deemed "systemically important", APRA would have to decide its regulatory approach to implementing the rule. APRA could decide to impose the same treatment on all banks.For more on Basel III, see Banking Day's Basel III backgrounder.