More than Asian takeovers on ANZ's mind 28 November 2007 4:38PM Ian Rogers For all the talk that Mike Smith, the newish CEO of ANZ differs from his predecessor, there's one message where he won't dissent from the position of John McFarlane or that of many other bank CEOs.Like the rest, Smith thinks the four pillars policy that prohibits mergers of Australia's major banks is a stinker.Only the context is different, though subtly.In the course of making a case for more vigorous investment by Australian banks, and mainly by ANZ, in Asia, Smith asserted that "Australia's four pillars policy has developed an inward looking culture within significant parts of the Australasian banking system."He did not elaborate much on the cultural issues beyond drawing comparisons with the technology options available to customers in Australia and in other advanced markets (see next article).Smith later went on to say that it was "time for us to be more outward looking, innovative and customer focused" and in "Australia's national interest to move beyond the four pillars policy and allow the banking system to be subject to the same competition policy that all other Australian businesses face."An advocate of offshore investment by banks, Smith constructed something of a straw man in his argument that one reason Australia's major banks might like to merge is to counter the prospect that banks from China and elsewhere in Asia were creating "the next wave of competition" in Australia. His main evidence for this was the recent opening by Industrial and Commercial Bank of China of a representative office in Australia, part of a wider reach by ICBC into international markets. Smith has previously made clear that ANZ now seeks to step up its investments in Asia, something bound to require more capital than can be funded through retained earnings of ANZ (the smallest of the four major banks) and a strategy already earning the bank a discount in the price to earnings ratio of its shares.