A Labor government could initiate a royal commission into banks after accusing Prime Minister Malcolm Turnbull of being too quick to rule out an inquiry into the sector.
The shadow cabinet is understood to have considered the idea of launching an inquiry if elected, after the government rejected calls for a commission despite Mr Turnbull criticising the big banks for mistreating their customers.
Mr Turnbull on Wednesday used a Westpac 199th birthday function to remind banks of their duties not just to shareholders but the wider community.
He accused some banks of "taking advantage" of their customers.
The prime minister's comments came as the Australian Securities and Investments Commission investigate Westpac over the alleged multi-billion dollar rigging of interest rate trading.
But Finance Minister Mathias Cormann on Thursday said he saw no need for a royal commission.
"Our banking system is well regulated," Senator Cormann said.
Banks needed reminding of their social obligations but rejected the idea that white-collar criminals were being let off under the coalition government, he said.
"Whenever anybody does anything wrong, they have to have the book thrown at them," Senator Cormann said.
Opposition Leader Bill Shorten told reporters in Brisbane the fact that Mr Turnbull was concerned about the "bad behaviour" of banks pointed to the need for an inquiry.
"It's time for Mr Turnbull to stop ruling out quickly the option of the royal commission and instead start listening to what every day Australians are saying and they don't like the bad behaviour of banks," Mr Shorten said.
"I think Australians are sick of politicians who talk tough and do nothing."
However, he stopped short of promising Labor would initiate a royal commission if it won the next election.
Several coalition members have backed a royal commission.
"We need a full royal commission into the profit-driven and immoral activities of the big banks and they must pay an appropriate level of compensation to clients for past wrongs," former government whip Warren Entsch said.
Nationals senator John Williams, who last year crossed the floor to support a Greens motion for a royal commission, said he still believed it was warranted.
Treasurer Scott Morrison said Mr Shorten was only looking at a banking royal commission as a distraction in the wake of the unions royal commission.
"This is Bill Shorten seeking to play politics," Mr Morrison told Sky News.
Asked whether he would rule out a banking inquiry, Mr Morrison said: "We are not proposing one, so I don't need to rule one out."
He said the banking and finance sector was "well regulated and incredibly stable".
"The sort of commentary that Bill Shorten is engaged in does potentially do harm to confidence about that sector and I don't think that is a very helpful thing for him to do," Mr Morrison said.
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