Consumers will be protected from shoddy financial products but not their own actions, if the Murray financial system inquiry recommendations are implemented.
Inquiry head David Murray, former chief executive of the Commonwealth Bank of Australia, played down expectations the recommendations would fire-proof consumers.
Mr Murray said the recommendations were not meant to absolve consumers of responsibility for their choices or insulate them from market risk.
"Rather, they are intended to reduce the risk of consumers being sold poor quality or unsuitable products," he told the Committee for Economic Development of Australia.
As the banking and superannuation industries chew over the recommendations of the year-long inquiry, Prime Minister Tony Abbott says the government won't hurry its response.
"We're not going to rush something out before Christmas," he said on Monday, a day after the inquiry's report was made public.
Instead, the recommendations would be carefully digested, he said.
But the Consumer Action Law Centre believes the inquiry represents a "paradigm shift" that recognises that consumer welfare should be at the core of the system.
Among its 44 recommendations is a call for banks to retain a greater amount of capital in reserve as protection against future financial crises, rather than relying on a taxpayer bailout.
Mr Murray disagreed with the major banks' belief that they were already adequately capitalised, saying they were not "unquestionably strong".
He wants to see Australia's banks ranked in the top 25 per cent of global banks.
The major banks lie somewhere between the global median and the 75th percentile.
Australian Bankers Association chief Steven Munchenberg said the recommendations would need to be tested to see whether they helped or hindered the banking system in serving the needs of the economy.
The inquiry also seeks changes to the surcharges on credit card and other card transactions.
EFTPOS provider Tyro Payments estimates up to 10 million lower income Australians could save up to $500 million a year in fees and surcharges that effectively subsidise the premium and platinum cards usually used by better-off cardholders.
"This is unfair, unjustified and un-Australian," Tyro boss Jost Stollmann said.
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