Question

When was the four pillars policy introduced and what is it?

Option 1: 1998 - It promotes competition among the top four banks in Australia.
Option 2: 2001 - It restricts mergers between major banks.
Option 3: 1980 - It encourages collaboration among the top four banks.
Option 4: 1990 - It regulates interest rates in the banking sector.

Answer 1

The four pillars policy was introduced in the 1990s in Australia to restrict mergers between the four major banks and maintain competition in the banking sector.

Step-by-step explanation:

The four pillars policy was introduced in the 1990s in Australia. It is a banking policy that restricts mergers and acquisitions between the four major banks, with the aim of maintaining competition within the banking sector. The four pillars refer to the Commonwealth Bank, Westpac, ANZ, and National Australia Bank.

This policy's objective is to prevent any one bank from gaining a dominant market position and to ensure a competitive environment to the benefit of consumers. This policy emerged during a time when the banking and financial system was under stress globally, and it has become a cornerstone of Australian bank regulation.