David Gruen of Treasury recently made mention of the importance of “The Four Pillars” structure (foundation) to the resiliance of the Australian Banking Market.

“The Four Pillars” DECODED?

Some Theory:

The Prophet Ezekiel was concerned with the divine nature of the Natural Numbers. His Third Temple and The One (Merkabah) visions are similar in form to The Sierpinski Carpet and Sieve fractals.

These can be found in the mathematics of what is commonly known as Pascals Triangle.

The four unknowns (elements) are at the core of these forms. In our oral tradition four is the number of force, fortress (fort).

Financial Markets are human (biological systems); they are locally random and incredibly unpredictable but they need to find balance. Over a very large number of transactions (movement) they have theoretical structure.

The image above is an infinitely repeating form.

A sort of vision of The 80/20, 20/80 Rule.

The Four Pillars banking structure has this strong form and you would expect the four to contol 80% of the Australian Banking Market.

Gruen said The Four Pillars policy has in practice contributed to:

1. Eliminating takeovers between ASX:[ANZ, CBA, NAB, WBC]
2. Reducing their incentives to become more highly leveraged
3. Reducing international and domestic competitive pressures
4. Producing better margins and stable profitability

He also concluded that the higher costs to the public of this was recouped by the benefits of stability.

Stoner concurs and would not be surprised to see other nations adopt a Four Pillars banking structure of their own.

Declaration of Interest

Stoner has shares in ASX:CBA