A royal commission into the financial industry will damage its strong reputation among international investors, the top banking body says.
The Australian Bankers' Association has slammed federal Labor's pledge to hold a royal commission if elected, labelling it unnecessary and a waste of money.
"We don't understand what this royal commission is meant to achieve," ABA chief executive Steven Munchenberg said.
"Banks are particularly concerned that a call for a royal commission will send alarm signals to international investors about Australia at a time of global volatility."
He acknowledged there have been too many incidents in the banking system where standards have not been met and customers failed.
But the banking industry has recently undergone a comprehensive review by the Financial System Inquiry, and is implementing measures to ensure the integrity of the system, Mr Munchenberg said.
A royal commission would cost taxpayers $53 million and take several years before delivering its findings, he added.
"Australian banks are already highly regulated," Mr Munchenberg said.
"Banks support the core of the economy and highly value their social license to operate."
Labor leader Bill Shorten said public confidence in the banking and financial services sectors had taken "hit after hit" in recent years, with a series of scandals in the industry leaving tens of thousands of victims out of pocket.
Industry Super Australia has backed Mr Shorten, saying it is becoming increasingly concerned a lack of trust and confidence in the banks could infect confidence in their involvement in compulsory super.
"Over recent weeks, months and years Australia's major banks have faced repeated allegations and evidence of wrongdoing that has reduced public confidence in banking and finance," ISA said.
