Ian Harper on competition - relax 23 April 2015 4:29PM Bernard Kellerman Big picture financial reform remains largely the preserve of the Murray Inquiry. However, there are aspects of overall competition policy that the Big Four banks in particular should be aware of, according to the chair of the Competition Policy Review. Yesterday, Professor Ian Harper, who has chaired the competition policy review, shared his insights on the final report by his committee.The report makes 56 recommendations for reforms across three key themes: competition policy, laws and institutions. Speaking after his formal presentation to a luncheon audience organised by the Macquarie University Centre for the Health Economy, Harper began by emphasising that a "big picture of competition in financial services was obviously germane" to the Murray Inquiry."The specific issues that bear on the financial services sector, such as the price signalling rules - we recommended that they no longer be there, let alone be extended to the rest of the economy," he said.This topic is picked up under what is called "concerted practices" in Harper's report on the productivity review."We make no comment about the trade-off between stability and competition in financial services because that was Murray's brief," he said. "The overarching framework that we put in the (productivity) report is that competition isn't a be-all and end-all. In instances where there is a strong public policy case to suppress competition because the competition itself is the problem, is completely justified."The financial services sector is one area where that's true," Harper said. "Competition, in tooth and claw, in financial markets creates instability. That's why we have financial market regulation."Harper did touch on the question of the Four Pillars policy and concerns about the large banks potentially having market power in certain areas. "This comes under the Competition and Consumer Act in the same way that every other sector does," he said."Simply having market power is not an offence in itself. Nor is gaining market share or market power by virtue of a merger necessarily an offence.""Taking advantage of market power to harm a competitor is an offence; we say that should be changed to make use of market power for the purpose, effect, or likely effect of substantially lessening competition in a market - that should be an offence."If organisations are big, or that acquisitions would lead them to getting bigger or gaining more market share - that's not, ipso facto - the case that substantially lessens competition. And even if it does, that could be in the public interest."