With the banking sector pushing back hard against the Reserve Bank's proposed capital ratio changes you could be forgiven for thinking we were headed for some sort of self induced credit crisis.

The Reserve Bank is proposing a lift in the amount of risk weighted capital retail banks hold, from 8.5 per cent to 16 per cent.

The banks aren't happy, calling it overly conservative and warning it could limit the availability of credit in some sectors of the economy.

But the Reserve Bank seems committed to shoring up the banks against the risks of a major crisis any more