A new analysis suggests the “too-big-to-fail” status is worth as much as $4.5 billion a year to the big four banks.

Australia’s big four banks could be enjoying an advantage worth as much as $4.5 billion over their smaller rivals.

A new analysis released before the next stage of the federal government’s financial system inquiry gauges the credit ratings of ANZ Bank, Commonwealth Bank, National Australia Bank and Westpac and their cost of raising funds.

The research by Macroeconomics commissioned by Customer Owned Banking Association estimates that due to their “too-big-to-fail” status, the big four benefit by $2.9 to $4.5 billion annually.

The association, which represents building societies and credit unions, urges genuine and sustainable competition in its submission to the inquiry.

“Give us a level regulatory playing field and let us get on with providing more Australians with competitive, responsible and ethical banking services, COBA’s acting CEO Mark Degotardi says.

The inquiry, chaired by former CBA boss David Murray, will release second-round submissions on Friday.

In his interim report in July, Mr Murray said the banking sector was “competitive, albeit concentrated”.

Four regional banks – Bendigo and Adelaide, Bank of Queensland, ME Bank and Suncorp – in their latest joint submission believe his statement does not give enough consideration to the likely future of competition given the current inequalities.

Chartered Accountants Australia and New Zealand is also concerned the financial inquiry is not lost in myriad existing inquiries and submissions.

The group’s head of advocacy Rob Ward says there are at least a dozen reviews and inquiries in play or due to start which overlap each other.

They include tax reform and retirement and the superannuation industry.

“It is imperative that any recommendations made by the government in regards to the financial system inquiry are not made in isolation,” Mr Ward said.

Mr Murray is due to release his final report and recommendations in November.