September 17, 2009

Australia's government should maintain a ban on mergers between the country's four major banks as any such move would not be in the national interest, an inquiry by parliament's upper house Senate found on Thursday.The inquiry by the Senate Economics committee, which is not binding on the government, followed the merger of Westpac Banking Corporation ( WBK - news - people ) and St George Bank Limited and looked at whether conditions should be placed on future bank mergers.

The so called 'four pillars policy', originally introduced in 1990, blocks mergers between the four largest banks: Westpac, Commonwealth Bank, National Australia Bank ( NAB - news - people ) and Australia and New Zealand Banking Group ( ANZ - news - people ).It was designed to ensure competition in the banking industry and protect consumers, but bank chiefs have long argued for its abolition, believing it prevents them from competing effectively on the global stage.