With the weeks counting down to the release of the interim report from the Financial System Inquiry, minds will be turning again to the question: what on earth will they propose? The need for any surgery, or even a medical review of Australia's financial services industry is slight. Thanks to home grown innovation - principally industry superannuation - and a mostly effective body of regulatory agencies, the industry is stable, profitable and, on the whole, ably led. As consultants AT Kearney wrote in their submission, "the Australian banking industry has performed remarkably well over the last decade. "Demand for the core economic functions has increased steadily, and banks have stepped up to satisfy a lion's share of this demand." Questions of competitive intensity and regulatory favouritism do exist, but if addressed will lead to just as many new questions on efficiency and industry structure. A more fragmented market sharing arrangement is the wish of many parties that made submissions to the Murray inquiry, though few proposed any remedies other than a capital constraint or tax on the big banks. Few pushed the case for a more concentrated market share, a topic Murray could well address. Is four pillars the best and only option? What about more pillars, even breaking up big bank franchises? What about three? Or two? Or one? The Australian Bankers Association was formed to prevent a grand unification of the banks in the late 1940s. But perspectives change. If there is one long-standing but unfulfilled wish of Australia's banking elite, it must be that further mergers are warranted. If mergers are beneficial, from a cost point of view, and manageable from a financial stability standpoint, they should be allowed to take place. Three big banks or two, it won't really matter. The main objection to further concentration has been that if it were allowed, it must elevate the risk that all-encompassing measures by the public sector would be needed to rescue a failing banking giant - of the kind employed at the height of the GFC to sustain the entire industry. What we saw in the US and the UK with a conga-line of too-big-to-fail banks needing to be bailed out will always be pointed at by those who want more banks and less risk to the public purse. The trade-off has to be serious cuts in the cost of producing banking services and a reduced impost on the economy of this most basic utility. So fewer pillars, please, and lower costs.