Basel III's capital buffers will become part of APRA's Prudential Capital Requirement (PCR) under APRA's new Basel III roadmap.APRA proposes to add the conservation buffer to the PCRs that it currently calculates for each individual bank and other authorised deposit-taking institutions (ADIs). The countercyclical buffer created by Basel III will be imposed "through an extension of the capital conservation buffer", APRA added in its discussion paper.The PCRs are one of APRA's key mechanisms for supervising ADIs. The current levels of the PCRs are kept secret, on the grounds that disclosure of changes to an ADI's PCR could destabilise it. Hence, the actual conservation buffer for each ADI will also be kept secret.The Basel III framework says conservation buffers - extra amounts of equity - can be as large as 2.5 per cent for an individual bank. Banks that do not meet this conservation buffer are to be subject to restrictions such as limits on dividend payouts. But, in practice, banks are expected to treat the conservation buffer as mandatory.In the discussion paper, APRA says that it will "have regard to the cumulative impact of its capital requirements when determining the size of the capital conservation buffer to apply to each ADI". In practice, this seems likely to mean that APRA will calculate a PCR for each institution that includes at least the Basel III minimum of 7.0 per cent of common equity.The countercyclical buffer is an additional amount of Tier 1 capital (up to 2.5 per cent) to be required across the system at times of high and risky credit growth.The discussion paper says that APRA will publicly announce a rise in the countercyclical buffer at least 12 months before it comes into effect. This period appears to be designed to give ADIs time to raise capital.