Labor is playing politics with the cornerstone of the Australian economy by proposing a royal commission into banks, Treasurer Scott Morrison says.
Opposition Leader Bill Shorten on Friday pledged a Labor government would hold a $53 million royal commission into the financial sector following a series of scandals.
"Many Australians have suffered through the decisions of banks and financial institutions," Mr Shorten told reporters in Melbourne.
"Today I say enough is enough."
However, Mr Morrison said while there were serious issues to be addressed in the industry it was well regulated by three bodies, one of which had the powers of a royal commission.
"What we are seeing is Bill Shorten playing politics with one of the most fundamental institutions in our economy," Mr Morrison said.
He said the banking system had a "tough cop on the beat" in the form of the Australian Securities and Investments Commission.
Yet Labor was opposed to putting a cop on the beat of a another sector - the building and construction industry, he said.
"It's a reckless distraction from his failure to come to terms with the fact that he wants to defend corrupt and criminal practices in the construction industry," Mr Morrison said.
Mr Shorten said public confidence in the banking and financial services sectors had taken "hit after hit" in recent years.
The commission would examine:
* Illegal and unethical behaviour in the financial services industry.
* The industry's duty of care to customers.
* Culture, ethical standards and business structures of financial institutions.
* Whether regulators are well equipped to identify and prevent illegal and unethical behaviour.
The Australian Bankers' Association says an inquiry would have international ramifications and would be a waste of money.
"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," ABA chief executive Steven Munchenberg said.
There had been too many instances of banks not living up to community standards, but those instances had already been subject to "incredible scrutiny".
Prominent Liberal backbencher Warren Entsch says the only way to get to the bottom of concerns about the behaviour of banks was to have a royal commission.
"(The banks) are waiting out their victims, knowing at some stage time will take its toll and they'll walk away without almost no consequences whatsoever," Mr Entsch said.
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