Joe Hockey says the final report from the independent financial system inquiry lays out a blueprint for the next decade.
The treasurer released the report that was put together by David Murray, the former boss of the Commonwealth Bank of Australia and inaugural head of the Future Fund, and his team after a year-long review.
"The financial system is vitally important to boosting productivity and growth in the Australian economy," Mr Hockey said at the release of the report in Sydney.
The report sets out a package of 44 recommendations to lay a blueprint to guide the financial system over the next decade.
"The recommendations of the inquiry seek to improve efficiency, resilience and fair treatment and in the financial system allowing it to achieve and support growth and a better standard of living for future and current generations," Mr Hockey said on Sunday.
The government intends to further consult with industry and consumers before making any decisions on the recommendations.
This consultation will occur up until March 31, 2015.
The review recommends Australian banks retain more money to minimise their risk of failure and improve competition.
It would also level the playing field for smaller banks and lenders, reducing the perception that the government would step in to rescue the big banks if they were in trouble.
The big banks have already complained that holding extra capital would be damaging, and ANZ says it will result in higher interest rates for customers.
But Mr Hockey said the government is charged to do what is right to strengthen the Australian economy and ensure that the financial system is as robust as it can be.
"We have got to weigh up carefully the implications for financial services providers," he said.
"But I want to emphasis we need to prepare now for the challenges that may lie ahead."
Mr Murray didn't believe it would impact on interest rates.
More than one-third of the recommendations seek to improve competition in financial services.
They focus on five specific themes - making the financial system more resilient, lifting the quality of life for Australians in retirement, driving economic growth and productivity, enhancing the confidence and trust in the system and enhancing regulator independence.
Mr Murray said the review also recommends changes to the card transactions so that surcharges are either eliminated or reduced and interchange fees can be reduced over time.
The inquiry found that the 2008-2009 global financial crisis demonstrated financial systems are prone to instability and any resulting financial failures can have a significant cost to taxpayers, economic output and employment.
"We want not only a high quality financial system but one in which in the event of a crisis, which ultimately will happen again, we want the taxpayers off the hook as far as we can see," Mr Murray told the conference.
Mr Hockey made it clear there is no pending financial crisis in Australia.
"I want to emphasise that, lest anyone misinterpret," he said.
Speaking later, shadow treasurer Chris Bowen said Labor would work as constructively as possible to ensure any sensible recommendations are implemented and implemented in as "smooth a way as possible".
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