“The fundamental problem in our banking industry is a lack of competition,” said Daniel Wild, research fellow with the free market think tank the Institute of Public Affairs. “The only way to make banks more responsive to customers is to reduce red tape and allow them to compete with one another more aggressively.”

“More licenses and the threat of jail time will not make banks more responsive to customers. Neither will political witch hunts, royal commissions, senate committees, tribunals, public service oversight, international regulation or liquidity and capital requirements. It will just further embed political influence and control over our banking sector.”

“To increase competition, the government should reduce red tape barriers to entry, abolish the four pillars policy and remove the guarantee that government will bail out banks if they fail.”

‘If the government is concerned about market power then they should be looking at ways of increasing competition, such as reducing red tape,” said Mr Wild.