The Senate banking competition report says that "no single recommendation will transform the banking sector into a paragon of competition". Instead, it makes a long list of recommendations for smaller reforms that, it says, will improve competitive pressures in banking.The most well-publicised of these recommendations is to reverse what the committee's majority calls the Government's "kneejerk" plan to ban mortgage exit fees.The majority report says the ban, announced last year, may lead to higher upfront fees. It also notes that "the only financial intermediaries that openly welcomed the abolition of exit fees were the major banks."New consumer protection laws - which restrict exit fees to reasonable amounts - only came into effect a few months ago, it notes. They should be given a chance to work, the report says. But if the ban proceeds, the report suggests, non-ADI lenders should be made exempt.However, the ALP minority report strongly rejects these arguments, suggesting the Government is not looking to change its decision.Among other recommendations, the report says the Government should:-- Establish a broad-ranging inquiry modelled on the Campbell Committee inquiry of the early 1980s. A number of finance experts have called for such an inquiry. Government senators said, in their minority report, that evidence did not support the need for such an inquiry.-- Have the Reserve Bank publish enough comparative data on banking profits to allow judgments about whether profits are too high and competition too low.-- Make banks justify lending rate increases above the official cash rate, with verifiable evidence that the extra increase is necessary.-- Take steps to make it easier for new players to enter the industry, and bolster the role of both the smaller banks and international banks. The Australian Bankers Association focused on these recommendations in its reaction and strongly supported them.-- Require banks to re-route, for 13 months, all electronic debits and credits of customers moving to a new bank.-- Standardise the fee for institutions using the Government's wholesale funding guarantee.-- Create a small business lending code. At the same time, the report reinforced last week's conclusion of another parliamentary inquiry that found no compelling evidence that banks have unfairly turned off the tap on small business lending. (The Australian Chamber of Commerce and Industry, the peak lobby group for medium-sized businesses, called these findings "inadequate").-- Ensure the Big Four banks do not take over any more regional banks - though the committee didn't believe existing mergers should be even partially reversed, as is happening in the UK.The Australian Competition and Consumer Commission has already signalled that further acquisitions by the Big Four are unlikely to be approved. ACCC chairman Graeme Samuel told a panel discussion, organised by the Australian Centre for Financial Studies in Melbourne last month, that, while he would not rule out any further bank mergers, any new merger proposal would be subject to "the most careful and rigorous analysis".