* New Japan FSA head warns against inflexible capital rules
* Says bank capital regulations must consider business models
* Says once-size-fits-all rules could crimp lending
* Says will continue to push Tokyo as finance centre
By David Dolan and Noriyuki Hirata
TOKYO, Aug 8 (Reuters) - Japan is pushing for more flexibility for bank capital adequacy rules, even as regulators in the rest of the world argue for stricter limits to avoid another financial crisis.
Katsunori Mikuniya, the newly appointed head of Japan's Financial Services Agency, also said in an interview that he will continue efforts to improve Tokyo's standing as a global financial centre.
Japan is concerned the recent emphasis on core Tier 1 capital -- an increasingly watched measure of financial strength -- will be unfavourable to Tokyo's biggest banks and could further squeeze lending in the world's second-largest economy.
Regulators around the world are moving to tighten rules on banks following the global credit crisis, asking them to boost their capital buffers in order to stave off another meltdown.
But a one-size-fits-all approach could further damage still-fragile markets, Mikuniya told Reuters in an interview that took place on Wednesday but was embargoed for release on Saturday.
"Banks range from utility banks to investment banks and they all have special characteristics," he said.
"If you apply a uniform standard, there is a danger that you invite a tightening of credit."
Mikuniya, 58, a veteran bureaucrat with a reputation for expertise in capital markets, took over as head of the FSA in July, replacing Takafumi Sato.
CORE TIER 1 CAPITAL
Mikuniya, like Sato before him, is concerned regulators worldwide will push to adopt more stringent guidelines for how much core Tier 1 capital banks must hold.
Critically for Japan, core Tier 1 capital does not include preferred securities or preferred shares.
Top lenders Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group have raised billions of dollars since the onset of the financial crisis, a substantial part of it through preferred securities.
In addition, the government used preferred shares to pump money into failing lenders during the 1990s banking crisis. Lenders such as Shinsei Bank and Aozora Bank, as well as many smaller banks have yet to repay those preferred shares. The Basel Committee, which sets standards for global financial regulation, will put forward proposals at the end of the year to strengthen bank capital rules.
The committee is an arm of the Bank for International Settlements, a forum for the world's central banks. Committee members include representatives from the United States, Japan, Britain and other major economies, as well as emerging markets such as China.
Mikuniya also said he was keen to continue the regulator's plan to boost Tokyo's position as a global financial centre, although he did not give concrete details.
Tokyo has been overshadowed in recent years by Hong Kong and Singapore, which boast lower taxes and lighter regulation.
Under Mikuniya's predecessor the FSA rolled out a plan to win back foreign firms by removing firewalls between banks and brokerages, rejigging tax laws for foreign funds and allowing a market for professional investors. (Editing by Michael Watson)