Ian Narev insists the Commonwealth Bank is trying to do more to build the trust of its customers but has warned a royal commission would undermine the industry and hurt the economy.
Mr Narev says the banking behemoth ought not be immune from scrutiny, and it is rolling out a range of measures to ease community concerns.
"For our part, we were put on notice, the community expected to see change. We have listened, we are listening and we are acting. Our work is ongoing," Mr Narev told a parliamentary hearing in Canberra on Tuesday.
But Mr Narev says a royal commission into the banking sector could make it more difficult for banks to borrow the money they then loan out to "create the economic activity that will create jobs".
"The message that the convening of a royal commission would send about policy makers over the last decade, regulators over the last decade, bank management and governments over the past decade would not be positive for the industry, would not be positive for strength and would not be positive for the perception of our industry as unquestionably strong," he told MPs.
Labor frontbencher Matt Thistlethwaite said the banks had already done a pretty good job of damaging the industry over the past decade.
Mr Narev and ANZ boss Shayne Elliott are facing the House of Representatives economics committee for nearly three hours each.
It is the second time the pair have been called before the government's banking inquiry.
The government set up the inquiry in response to community anger after the big four banks failed to pass on an interest rate cut last August.
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