It is unrealistic for financial institutions to expect regulators to set rules identical to those operating in other countries, according to a panel of regulators speaking at the Thomson Reuters Regulatory Summit in Sydney yesterday. Panellists said calls for greater regulatory "harmonisation" across jurisdictions reflected a misunderstanding of the principle of international harmonisation.A number of submissions to the Financial System Inquiry argued that regulators, particularly the Australian Prudential Regulation Authority, need to be more consistent with their overseas counterparts.The head of the Reserve Bank's financial stability department, Luci Ellis, rejected this argument. "If countries want to be a little more conservative they should be allowed to do so. That has always been an accepted principle in Australia," she said.Ellis said: "You want to allow banks to play in the global market and base regulation on global standards. We are attempting to have standards that are globally agreed but it does not always come out fully globalised."The senior executive leader in the financial markets infrastructure department of the Australian Securities and Investments Commission, Oliver Harvey, said: "We look for broad agreement on the principles. Jurisdictions think about things globally but then you get down to technical discussions and have to deal with local issues."The chief executive of the anti-money laundering regulator Austrac, John Schmidt, said the Australian anti-money laundering and counter-terrorism financing regime was based on standards established by the Financial Action Task Force, an inter-governmental body established in 1989.Schmidt said: "The G20 countries are pushing for more alignment on the FATF rules. At the moment we are working on common customer due diligence."However, we have latitude to exempt, modify and clarify, depending on the class of business, the services offered and the type of customer. It is very useful to be able to nuance the regime."Ellis said banking was one of the few industries where regulators even tried to achieve international harmonisation.