This paper examines the technical efficiency of Australian banks during the post-Wallis period (1997)(1998)(1999)(2000)(2001)(2002)(2003)(2004)(2005). The results based on data envelopment analysis reveal that the extent of technical efficiency varies across the banks and over the years. The National Australia Bank, Commonwealth Bank and Macquarie Bank are found to be technically efficient, whereas Adelaide Bank, the Bank of Queensland and Westpac Bank are found to be prominently inefficient. Technical efficiency is the lowest among small banks and has declined over time largely due to deterioration in scale efficiency. Medium-sized banks have outperformed both the small and large banks in terms of efficiency improvements. Some insights into the debate over the removal of the 'four-pillar' policy are provided. * We are grateful to two anonymous referees for helpful comments and suggestions on an earlier draft of this paper. Thanks are also due to the editor, Ross Williams, for encouragement. We alone are responsible for the remaining errors, if any.

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