Since the release of the Wallis Report in 1997, the blanket ban on mergers between Australia's 'big four' banks, known as the 'four pillars policy', has received a great deal of publicity in the media. The 'four pillars policy' prohibits mergers between the ANZ Banking Group, Commonwealth Bank, National Australia Bank, and Westpac. The chiefs of a number of these banking institutions, notably National Australia, Commonwealth and Westpac, have criticised the four pillars policy publicly. Yet, the Federal government have announced on a number of occasions their dedication to the merger restriction, despite the fact the Wallis Committee recommended that it be removed.
This thesis analyses the motives behind underlying the four pillars policy, and examines the current state of the retail banking sector to determine if the maintenance of the 'four pillars policy' is justified. This thesis also examines hypothetical major bank mergers, to test whether these mergers would benefit the Australian economy, particularly bank customers.