Treasurer Wayne Swan confirmed yesterday that reports of Australian "exemptions" from Basel III rules had overstated the case, and confirmed Australia would comply with all Basel III rules.Swan said, in his weekly Economic Note yesterday, that "our financial system will, of course, comply, in full, with new international standards".The Australian Bankers Association also issued a statement, saying that claims of an exemption were wrong.A series of reports from journalists with Swan and Prime Minister Julia Gillard at the G20 meeting, in Seoul, culminated in a front-page lead story in The Australian headlined: "PM helps big banks beat new G20 rules". The report said Gillard had "won significant concessions for Australian banks at the G20 summit  ... exemptions for Australian banks from the new 'Basel III' liquidity guidelines." The truth is slightly different. As reported previously in Banking Day, the proposed Basel III minimum liquidity standards would require banks to hold substantial government debt. That's a problem for countries like Australia, Singapore, Hong Kong and Saudi Arabia, where government debt is low (see our Basel III backgrounder).The problem is one of several which the Basel Committee several months ago agreed needs special treatment. A sub-committee is now studying how the rules will apply to Australia and other countries in the same situation. On information supplied to Banking Day, it is unlikely that Swan or Gillard would have needed to do any work at the G20 meeting to save Australian banks from having the minimum liquidity standards applied to them without adjustment.Swan's Economic Note said that Australia's global peers "have now recognised" the liquidity ratio problem "and are committed to rules that recognise those very low levels of debt". A spokesman for the Treasurer said the Economic Note represented all the Treasurer wanted to say on the matter.Swan's Note did add that "no Australian bank can, with any justification, cite these global reforms for stinging their customers with any additional costs."  However, there are, as yet, no apparent instances of banks seeking to use the Basel III rules to justify cost increases.As predicted in Banking Day last Thursday, the G20 meeting declared high-level agreement on the Basel III package, with details still to be finalised. The meeting focused, without much success, on currency and current account issues.