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In Australia, the banking sector is dominated by four main institutions, the ANZ Banking Group, Commonwealth Bank, National Australia Bank, and Westpac. To maintain a

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In Australia, the banking sector is dominated by four main institutions, the ANZ Banking Group, Commonwealth Bank, National Australia Bank, and Westpac. To maintain a competitive banking market, the government adopts the four pillars policy which prohibits mergers between any ofthe big four banks. Examine the banking industry using the theory and models of market (or industry) structure. Now suppose mergers are allowed between major banks and they have strong incentives to merge with each other. Explain what will happen to the market structure ofthe banking industry eventually. Describe the advantages and disadvantages of having an industry with this market structure. How should the government regulate the industry after mergers

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