To give it its formal title, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has shone a spotlight on the sector, notably the big four banks that dominate it.

But just how dominant are the big four in the Australian financial landscape, how did they attain this stranglehold and can they maintain it following the royal commission's final report?

How big are Australia's major banks?

Australia's major banks make up four of the seven biggest companies on the local stock exchange by market value, worth around $360 billion combined.

The biggest of them, the Commonwealth Bank, has at various points in time been Australia's most valuable company and currently sits second only to mining giant BHP, "The Big Australian".

Many Australians directly own shares in the banks, while most have stakes through their superannuation funds.

The big four also completely dominate Australia's financial landscape, with combined assets (mainly loans owed to them) totalling more than $3.6 trillion — more than twice the value of Australia's annual economic output.

The major banks hold around $3.6 trillion in assets between them according to their latest annual reports. ( ABC News: Alistair Kroie )

A 2016 report by The Australia Institute think tank found these assets generated large profits for the major banks — the highest in the world.

Australian bank profits equalled 2.9 per cent of GDP in 2016, the highest share of ten major economies studied. ( ABC News: Alistair Kroie )

Assisting this profitability is the significant concentration in Australia's banking sector.

More than 80 per cent of mortgage borrowers have a loan with one of the four big institutions, making Australia's financial sector one of the world's most concentrated.

Australia's five biggest banks have one of the largest market shares amongst key developed economies. ( ABC News: Alistair Kroie )

Also boosting profitability, to date, has been the big banks' focus on mortgage lending.

Because they have traditionally been considered much safer than other loans, mortgages require banks to hold less in reserve to protect against losses, making them much more profitable than most other forms of lending.

Combined with Australia's two-decade property boom, this has resulted in Australia's banks (big and small) having more exposure to real estate than their counterparts in other countries.

Australian banks have the highest proportion of residential mortgages as a share of their loan book. ( ABC News: Alistair Kroie )

Between the four of them, they hold almost $1.4 trillion in mortgage debt, which is equivalent to about 80 per cent of Australia's annual economic output.

The big four banks between them hold mortgages worth around 80 per cent of Australia's annual economic output. ( ABC News: Alistair Kroie )

The big four dwarf the rest of Australia's retail, or consumer-focused, banking sector — even the local branches of major international banks that are dominant in other countries.

How did they get so big?

All four majors have lengthy histories, with the oldest, Westpac, tracing its history back more than 200 years.

Along the way, all four have swallowed up smaller rivals in Australia and across the ditch in New Zealand to make them the Australasian oligopolists they are today (an oligopoly is where a small group of companies or individuals control a market for a good or service).

ANZ

Here are the main takeovers and mergers that saw London-based The Bank of Australasia, established in 1835, become today's Australia and New Zealand Banking Group Limited.

ANZ's history traces as far back as 1835, and ultimately involved the merger of three banks dating to the mid-1800s. ( ABC News: Alistair Kroie )

CBA

The youngest of the big four banks, the once-publicly owned Commonwealth Bank, is now the largest. Here is how it got that way, mainly by gobbling up various state banks during times of financial turmoil.

The Commonwealth Bank, for most of its history Government-owned, swallowed up a large number of state-owned banks. ( ABC News: Alistair Kroie )

NAB

In 1982 the National Bank of Australasia and Commercial Banking Company of Sydney, both well over a century old at that point, merged to form National Australia Bank. This is the story of their growth and NAB's expansion since the merger.

Two Australian banking giants merged in the early 1980s to form what is now NAB. ( ABC News: Alistair Kroie )

Westpac

Starting life as the Bank of New South Wales way back in 1817, Westpac is Australia's second-largest financial institution, with its scale cemented by a mega-merger with St George Bank during the global financial crisis in 2008.

Westpac is Australia's oldest bank and currently its second biggest on most measures. ( ABC News: Alistair Kroie )

Have we passed 'peak bank'?

While the big four banks appear to be maintaining their market dominance, it seems the halcyon days of Australian banking have passed.

Since reaching peak market value in 2015 (except for NAB, which still has not bettered its pre-GFC highs) the big four have lost ground.

Not only are investors anticipating slower loan growth, increased competition and rising bad debts, but the banks have, for one of the rare periods in their collective histories, become smaller.

ANZ, CBA and NAB have all shed, or are shedding, their wealth management divisions — the ones that have caused them so much embarrassment at the royal commission for taking fees without providing advice, not always acting in the best interests of their superannuation customers or unfairly failing to pay out on insurance policies.

Only Westpac is sticking it out in wealth management … for now.

Not only that, but the banks potentially face an unprecedented raft of regulatory reforms in the wake of the financial services royal commission.

A regulatory crackdown on loan approvals is already underway and has seen both housing and credit card debt decline.

However, there may be further changes to the way prospective borrowers are assessed, with responsible lending equalling lower profit growth for the major banks.

Some analysts are already talking about a "credit crunch", which could lower Australia's economic growth, or even tip the country into recession.

Such an outcome would result in a dramatic increase in bad debts on the banks' loan books and, with house prices falling in many parts of Australia, they may not be able to recover the full value of their loans by selling the homes of borrowers who have defaulted.

Whatever the recommendations, and however they are implemented by the nation's lawmakers, the days of easy profit growth for Australia's big four banks are gone and will not return for years, if at all.