Capital requirements for banks in New Zealand "should be conservative relative to those for international peers" the Reserve Bank of New Zealand said yesterday in its Financial Stability Report.The RBNZ said it was conducting a review of the capital adequacy framework and the minimum capital requirements that apply to locally incorporated registered banks. "In many countries, regulators are introducing or considering additional capital requirements for systemically important banks and additional limits on simple leverage. Australian authorities have been working to ensure that banks' capital positions are 'unquestionably strong', following the recommendation of a government inquiry," the RBNZ reminded readers.It said that "even though New Zealand banks are comfortably meeting current capital requirements, international developments mean their capital positions appear relatively less conservative than they did in the past."The Reserve Bank's initial assessment is that New Zealand banks have capital positions that are around the average of international standards. "However, there are a number of reasons why a stronger position might be appropriate for New Zealand, including that New Zealand, as a small open economy, is subject to significant shocks; New Zealand is relatively reliant on banks to provide consumer and business finance; the banking system obtains significant funding from international markets; and the domestic banking sector and its asset portfolios are relatively concentrated."The need for" relatively conservative capital requirements in New Zealand is one of the six principles that will guide the capital review," the RBNZ said.