The federal government has pre-empted a parliamentary review of the nation's banks by announcing a crackdown on the abuse and manipulation of financial benchmarks.
Criminal penalties, including jail time, could be imposed for unconscionable conduct and market manipulation in setting bank bill swap rates - a key benchmark used to price billions of dollars of loans, bills, bonds and derivatives.
Treasurer Scott Morrison, in making an announcement on Tuesday, said tougher rules would "ensure that past egregious conduct by the banks in manipulating benchmarks is prevented in the future".
The Australian Securities and Investments Commission is already pursuing three of the four major Australian banks over unconscionable conduct and market manipulation in setting the swap rate from 2010 to 2012.
"This package will ensure our regulatory regime is as modern and secure as any comparable regime found in equivalent foreign jurisdictions, such as the United Kingdom and the European Union," Mr Morrison said in a statement.
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It will become a specific criminal and civic offence to manipulate any financial benchmark.
Criminal acts will include making false or misleading statement or engaging in dishonest conduct in relation to determining a swap rate or other benchmark.
Labor has used the ASIC pursuit as evidence of the need for a royal commission into bank behaviour.
Commonwealth Bank boss Ian Narev is scheduled to appear before a House of Representatives committee on Tuesday afternoon as part of a government-initiated annual parliamentary review.
Other big bank chiefs appear on Wednesday and Thursday.
Opposition Leader Bill Shorten has dismissed the review, accusing Prime Minister Malcolm Turnbull of having an "absolute obsession" about stopping a royal commission.
