The existing framework of regulation is "entrenching a cycle of competitive distortions to the detriment of the overall banking system," Suncorp Group chief executive Patrick Snowball said on Friday."I don't believe we're seeing the innovation or the depth of competition that could be supporting all segments and geographies and driving our economy," Snowball said in a talk to an Australian Banking and Finance forum in Brisbane."Smaller banks are competing with one hand tied behind their backs. Perversely, the regulatory environment has enhanced the position of the major banks through supporting a lower cost of funds and lower capital requirements for the nation's biggest banks."These are the familiar complaints of small banks over the risk weighting of home loans, the implicit government subsidy on big bank liabilities and a disproportionate cost of compliance on small banks.Snowball pointed to different dynamics in insurance, Suncorp's major product line."We've seen many new entrants in the insurance market - Youi, Coles, Budget, Woolworths, Progressive and others - and it's competitive.""In insurance there is a level playing field, there are low barriers to entry and a much more liquid capital market with consistent capital treatment. "We're asking for that level playing field and consistency in banking."Regional banks do not need subsidies. We don't have the begging bowl out. We don't need to. "Suncorp Bank does not advocate taxpayer-funded intervention in financial services. Such intervention distorts the market as is evidenced with the existing capital and funding advantages afforded the largest banks in Australia."