Luci Ellis, the head of financial stability at the Reserve Bank of Australia, on Wednesday warned that banks should not lower their guard when calculating risks just because they were adopting the Basel III capital rules.

"Focusing only on capital would be like saying that all we needed to do to stop people being injured in car crashes was to ensure they all had big enough airbags. But bigger airbags are not enough. We also need safer driving, diligent policing and better roads," Ellis said.

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