06 August 2012 7:05am

Measures taken by the Government over the past couple of years to promote competition in the banking sector have not been effective and more needs to be done, according to a new report.

The report, which was prepared by Deloitte Access Economics for the mutuals association, Abacus, calls for a full-scale inquiry into the banking system.

Mutuals are at a competitive disadvantage to the major banks, because of increased funding costs and other impediments to competition.

The report argues that addressing the distortions in funding costs and regulatory burdens between the...