The Reserve Bank of Australia has once again endorsed the long-standing "four pillars" policy that in effect prevents any mergers between the four major banks in Australia.And in its submission to the Financial System Inquiry, the RBA went further and suggested the sale of a major bank may be a bad thing."The [four pillars] policy has been confirmed by successive Australian governments since the Wallis Inquiry in 1997," it said."In addition to its possible effects on competition in the banking sector, the policy also has financial stability effects."The four major banks are each systemically important due to their size and interconnectedness with other financial institutions. "Mergers between these banks would increase systemic risks arising from concentrations in the banking sector and add to the complexity and costs of a potential bank failure."The RBA said "foreign ownership of a major bank may lead to increased risk from greater exposure to international financial markets, or changes in the business models of Australian banks towards more complex and risky banking activities."It did concede, though, that "mergers between major banks and large international banks could have the benefit of providing more diversified income streams, and additional sources of capital, that are not related to the performance of the Australian economy."