The Australian Government is likely to oppose any move by the G20 to apply nationally policies being developed to reduce the moral hazard posed by the world's systemically important financial institutions.Treasury executive director, markets group, Jim Murphy, said there was a debate within the Financial Stability Board about whether the rules being developed for global institutions should flow through to domestic groups.Speaking at the IIR Basel III conference, held in Sydney yesterday, Murphy said: "We would say there are already rules that apply to financial institutions, with much greater vigilance in supervision. We would say we have the safeguards in place."Last year, the Financial Stability Board started working on a set of additional prudential rules for global groups that were deemed "too big to fail" because their failure would cause significant disruption to the wider financial system and economic activity.The FSB has identified 14 institutions that are to be subject to co-ordinated cross-border regulatory supervision that will be required to have a higher loss absorbency capacity than the minimum levels agreed under Basel III.Murphy's comments will come as a relief to the big banks, which are already contemplating new Basel III capital adequacy rules, conservation and counter-cyclical buffers, and leverage ratios.He said: "In Australia, we have at least four systematically important financial institutions. There may be more."We already have crisis management systems for dealing with domestic financial institutions."