RBA assistant governor Malcolm Edey asked yesterday whether global banking rules should do more to encourage large cross-border banks to set up subsidiaries.In a speech in Sydney yesterday, he suggested subsidiary structures could help lessen international interconnections between banking systems, something he said might be desirable.Requiring large international banks to set up subsidiaries could "ring-fence" their operations and make it easier to manage international episodes of financial stress, he said.Edey's comments appear directed at his international regulatory counterparts, rather than at Australian law-makers. Foreign banks in Australia have to incorporate locally in order to conduct retail banking, and Australian banks offshore mostly work through subsidiaries already.