Lawyers would be the big beneficiaries of a royal commission into the banking sector, acting prime minister Barnaby Joyce says.
The government, in rejecting a Labor call, argues corporate regulator ASIC has the same, if not more, powers to conduct any inquiry.
"The great beneficiary of a royal commission would be the solicitors, because they would have this going for a couple of years and at the end they would have done no more than what we already have with ASIC," Mr Joyce told ABC radio on Thursday.
There is speculation cabinet will give ASIC extra powers and funding to back government claims the regulator is the "tough cop on the beat".
The agency has said budget cuts in the form of efficiency dividends has limited its ability to conduct pro-active investigations.
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Treasurer Scott Morrison says the government will be making a response shortly to a capability review of ASIC.
"We've been doing the work on making ASIC even stronger," he told ABC radio.
But the treasurer declined to say whether he would use his ministerial discretion to direct ASIC to conduct an inquiry into the banking and financial sectors.
"We have the full force of a standing royal commission in the form of ASIC."
