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Big 4 to be grilled by PM's bank inquiry

AAP logoAAP 2/10/2016 Colin Brinsden, AAP Economics Correspondent

Does size matter?

ANZ, Commonwealth Bank, National Australia Bank and Westpac aren't called the 'big four' for nothing.

They are the four largest companies in the ASX 200 index by market capitalisation, raking in massive profits each year, while paying their executive huge salaries.

They perform a crucial role in the working of the Australian economy and were bedrock for the community during the 2008-2009 global financial crisis, when huge international institutions like Lehman Brothers went to the wall.

Yet for all this, they sometimes offer poor service and, in extreme cases, fraudulent advice.

Competition is likely to be a key issue when the nation's big four banks are grilled by a parliamentary committee over three days this week.

That, along with remedies to solve a string of financial scandals that have dogged the industry in the last decade or so, are expect to lead to a heated discussion. .

The hearings into banks by the House of Representatives economics committee is Prime Minister Malcolm Turnbull's response to demands for a royal commission inquiry into the industry.

Such calls were prompted by many sad stories of mum and dad investors being fleeced of their savings by dodgy financial advice.

Mr Turnbull fought against any sort of inquiry for months, saying a royal commission would be costly to taxpayers and would take years to solve any perceived problems in the industry.

Liberal senator James Paterson agrees.

"It would put at risk the reputation of our banks as some of the most stable and reliable in the world," he told Sky News on Sunday..

But Mr Turnbull finally succumbed in August after the federal election, announcing an annual hearing of the banks, similar to the twice-yearly appearances of the Reserve Bank governor.

While Labor has representatives in the 10-strong economics committee chaired by Liberal MP David Coleman, it's unlikely to placate their concerns.

Labor MP Shane Neumann for one does not think it will be good enough.

"How long are we going to have rip-off after rip-off, scandal after scandal, before the federal government takes seriously the public's concerns about what happens in the financial services sector," he told Sky News.

The hearing comes at a time when there are worries about the financial stability of one the world's largest banks, Germany's Deutsche Bank, shaking up global financial markets.

CBA, the largest of the the nation's banks, and its chief executive officer Ian Narev, will be first under the spotlight for three hours of questioning on Tuesday afternoon.

ANZ will appear on Wednesday, while NAB and Westpac will appear separately on Thursday.

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