Incidently, talking about banks, why can't American banks set up here and lend at essentially half price? Is it because of a AUDUS exchange rate downside risk, or is the banking sector not fully deregulated?
Back to economics class for you. The lending interest rates are based on the official cash rate by the Reserve Bank of the country in question. The Reserve Bank sets these rates to promote growth while still keeping inflation in check.
Westpac and Trustbank Merged and became just Westpac a few years after Westpac bought them out. It does happen.