Australian banks shouldn’t be too impacted by the changes to global banking rules that have been drafted this week in the Swiss city of Basle.

They have solid capital bases, dominated by real equity, are below the maximum level of gearing suggested in the new rules, and look like they will escape having to raise fresh share capital — unlike European banks that will face a daunting task of asking investors for billions of Euros in capital over the next year.

But like all banks, Australia’s will find that their dividend paying and capital management activities will be more strictly controlled and will need the key regulator, APRA, to sign off on them at certain times, perhaps in every instance.

The proposed changes will mean that share buybacks of the sort we saw regularly from the banks before the credit crunch, will become rarer. Certainly grandiose broker claims that the banks could return “$16 billion in surplus capital” as one analysts did last week, are off the planet.

According to reports, global bank regulators have agreed tough new rules for banks that could see defined limits placed on lending, dividend payouts and hard and fast rules on the quality of capital.

But the proposed changes won’t be introduced until the end of 2010 at the earliest, and if they follow other rule changes from the Basle Committee, there will be a transition period to allow all banks to come into line, according to a report in the latest edition of the Financial Times.

This is a far more important issue than the kerfuffle on bankers pay and bonuses.

The reports give us a flavour of the shape that our new bank liquidity and capital rules will take when APRA, the lead regulator, issues a discussion paper shortly.

This week APRA released a revamped discussion paper on remuneration that was mostly unchanged from an earlier draft. It will however now not apply until April 1, 2010, instead of the earlier start date of January 1.

The accord on the shape of new regulations follows the Group of 20 finance minister’s statement at the weekend in London.

The rules will force banks to substantially improve the quality and extent of the capital buffers they hold to absorb shocks, such as the credit crunch and recession of the past two years.

The FT said in its report that at least half of the capital cushion of banks must comprise common equity and retained earnings.

The Basel committee also agreed to put “hard” limits how much banks can borrow. It is likely to set a ceiling on borrowings of no more than 25 times assets. There will be no exceptions for less risky assets.

It also agreed that bank supervisors should be able to limit the ability of banks to make payouts to shareholders through dividends or buy-backs when times are good, enabling them to build “counter-cyclical” buffers against bad times.

This is a response to pressure from regulators and governments for some sort of counter cyclical policy to prevent bubbles developing and force banks to hoard capital from the good times. This is likely to need a change in local and international accounting policies.

The Group of 20 finance ministers referred directly to this in their statement on bank regulation on the weekend when they said: “We call on banks to retain a greater proportion of current profits to build capital, where needed, to support lending”.

Australia’s big four banks, the Commonwealth, Westpac, ANZ and National, are not likely to be impacted much by the changes, although they each have some sort of hybrid or floating rate note on issue and listed on the ASX.

CBA’s Perls have a hybrid look to them being a preference share stapled to a note. The 4th issue is currently listed and the bank this week issued the prospectus for the fifth issue of Perls.

The NAB has a floating rate security, Westpac and the ANZ have preference share hybrids listed. Suncorp and Bank of Queensland also have preference shares issues listed on the ASX.

Unlike European banks, these issues do not account for a high proportion of capital.

The Financial Times has reported that some major European banks have up to a third of their capital base in hybrid securities which will have to be replaced in the next year by fresh ordinary share issues.

Overall, Australian banks have high levels of ordinary issued shares in their capital bases.