APRA chair Wayne Byres has defended global banking regulation against the charge that its fragmented state adds cost for banks and their customers, hurts competition and exposes the system to greater risk of breaches.Speaking at last week's ASIC Annual Forum in Sydney, Byres said: "Fragmentation may not always be a bad thing. There are both costs and benefits."If you think back to the pre-GFC situation, markets were optimised for efficiency. Post-GFC was about throwing some sand in the wheels. There is a balance between efficiency and stability."People will have different views about whether we have got that right."The US chose to add things above the Basel standards. That was not an unintended consequence. It was an intended consequence."Macquarie Bank chief executive Mary Reemst, who was on a panel with Byres, said it was time for a look at the fragmentation and inconsistency in global financial regulation, in areas such as the adoption of Basel III, client money rules and regulation of over the counter capital.She said almost every jurisdiction has different anti-money laundering rules, with the risk that when this makes processes and systems more complex it can lead to breaches."The impact of this may show up increased costs, reduced competitiveness and increased regulatory burdens on banks and their customers. We need more co-operation across timing and implementation," Reemst said.Another member of the panel, JP Morgan chief economist and head of fixed income and foreign exchange strategy for Australia and New Zealand, Sally Auld said: "We have to comply with US regulations, some of which is not imposed on our domestic peers. This includes Dodd Frank and capital charges."These issues tend to emerge when markets get stressed. In times of constrained liquidity it will be a disadvantage for customers."The increased cost of two different regulatory regimes does not just affect us. It affects customers."Regulation since the GFC has been an iterative process over 10 years. Things have moved into a more normal state. There may be an opportunity to review the regulatory settings.Byres said: "My view is that consistency is better than it ever has been. A lot of work has been done to make sure things are more consistently applied."But because standards are higher and binding, the inconsistencies are felt more."