Going forward the majors will have a tough time getting mergers and acquisitions across the line, according to the chairman of the ACCC.
Following the majors' refusal to pass on the latest RBA rate cuts in full, the chairman of the Australian Competition and Consumer Commission (ACCC) Graeme Samuel, expressed concern at the state of competition in the banking sector.
"The risk is with four big banks, because of the diminished role of non-bank financial institutions, we end up with less than intense workable competition," he told the Australian Financial Review.
"That means it is easier for the big banks to conduct their business with perfectly legal, tacit co-ordination of pricing."
He went on to say that the ACCC was becoming "increasingly concerned" that the lack of competition would ultimately reflect in costs to consumers.
In keeping with these concerns Samuel said the ACCC is likely to block further bank mergers to prevent the sector from becoming even less competitive.
Samuel said the ACCC was not "very comfortable" when it approved the CBA's acquisition of BankWest, however let it through after being advised by the RBA and APRA that the deal was necessary for the stability of the financial system.
Late last year several bidders, including ANZ bank, were circling the troubled Suncorp bank, however acquisition attempts were thwarted after the government introduced its guarantee scheme.
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