The Australian Prudential Regulation Authority foreshadowed that it would take into account any proposals from the Financial System Inquiry when setting capital levels and other regulatory settings for the industry.In its second submission to the inquiry APRA pointed out that "the additional capital required by domestic systemically important banks [ie, the Big Four], which will apply to the major Australian banks from 2016, is a relatively new prudential tool."It said this had been established "taking into account the full suite of prudential requirements imposed by APRA." APRA said "the calibration of the D-SIB capital surcharge will be monitored by APRA, having regard to future industry and international developments. "Other proposals ultimately put forward by this inquiry, including those in relation to competitive issues and financial stability, may also impact the appropriate level for D-SIB capital requirements."Its submission is a reminder that, however earnest the work of David Murray's inquiry, it will be the existing regulators that dictate any change to capital and other controls on banking.