Frank Cicutto is paying the price for a generally bad banking policy

The rationale for four pillars is that it preserves competition among banks and preserves bank services to rural and regional Australia. Yet in the 23 years of the policy's life there have been dramatic rises in bank fees and dramatic reductions in branch numbers, especially in rural and regional areas. The policy is a failure. It is time for new thinking.

The challenge for John Howard, and Mark Latham, is to devise a new policy that encourages banks to provide banking services where they are needed most, and that don't place our major banks at a strategic international disadvantage.

One such policy would be to set bank licence fees as a very small proportion of turnover or assets, and then redistribute that money back to banks in proportion to their number of branches in rural and regional areas. This would mean the most profitable parts of Australian banking would subsidise branches in places where Australians really want them to be.

It would also mean the big four would subsidise the regionals. This, however, is a price the big four may well be prepared to pay for the freedom to get on with what they want to be doing. And it is a price we are entitled to request for the privilege of a banking licence.

Finer minds than mine can doubtless develop better solutions.

What is clear is that the four pillars policy is not working and Frank Cicutto, and the Australian economy, are paying the price of that failure.