Potential referee for a journal submission I have a paper to be submitted and most of the journals in my field would like to have a "potential reviewer" list (3-4 potential reviewer) by the author. Of course, the last decision to send to paper to these reviewers is up to the editor. 

I wonder if it is ethical to propose a researcher (who is expert of the topic of the paper) from your institution as a potential referee? Does it cause any conflict or unethical situation?
You shouldn't propose referees that have conflicts of interest. Any employee of your institute is conflicted. NSF adopt a similar stance for panelists: a panelist employed by the same institute as an applicant is conflicted. (Source: https://www.nsf.gov/attachments/108234/public/coi_1230P.doc.)

Conflicts may be real or perceived. For instance, an employee of your institute might be perceived as having a conflict, yet there might be no real conflict. Nonetheless, all conflicts should be avoided, because no one wants to be accused of malice. 

That said, you are ultimately bound by the journal's definition of conflict and you should follow their guidance. Unfortunately, many journals are rather vague about conflicts, so you might need to establish your own position.