The maximum reduction on minimum capital levels that banks using the advanced version of the Basel 2 capital framework can expect will be limited to 10 per cent in 2008 and 2009 the Australian Prudential Regulation Authority said yesterday. APRA will calculate the savings by reference to the capital ratios that would otherwise apply under the current regulatory capital regime.The bank regulator also said it would set a "prudential capital requirement" for each bank, building society and credit union "set at a level proportional to each ADI's overall risk profile" and subject to the minimum capital requirement of eight per cent.In practice this reflects APRA's current approach, but restated to conform to the so-called Pillar 2 of the Basel 2 framework, and which is supposed to capture risk factors not captured by the approach to measurement of credit risk.