More generally, the objectives of regulation are to avoid monopoly power, foster competition and protect the consumer’s interest. In regard to financial regulation, however, there is a slight change in emphasis in the objectives of regulation in the sense that the focus is on maintaining systemic stability and protecting the interest of the customer.
In the broader scheme, this issue comes down to a trade-off between international crossborder consistency and regulatory efficiency on a country-by-country basis. For the home countries of internationally active banks, the former is clearly important to avoid regulatory arbitrage.