Future Fund chairman and former federal treasurer Peter Costello says there is no purpose and no justification for a royal commission into the performance of the big banks or the financial sector.
Speaking in Sydney, Mr Costello said a royal commission was a last a resort if there is a need to establish "some kind of schematic illegality," within an institution - a circumstance that does not apply to Australia's banks.
"We've got a royal commission into youth detention - the suspicion is the Territory government might be covering up; a royal commission into sexual abuse, because the suspicion is institutions are covering up," Mr Costello told the Financial Services Council Leaders Summit.
"If you wanted to break up the banks you wouldn't need a royal commission to do it."
Mr Costello, who was Australia's longest-serving federal treasurer, said the only possible point of a royal commission into banks would be if stakeholders wanted to try and establish "personal liability for financial failures".
He said that does not apply to Australia's four pillar banking system.
"The only thing I'd say to you - and nobody justifies financial failures, nobody - but in the great scheme of things in Australia in 2008, compared to the US, compared to the U.K., our financial system performed beautifully," Mr Costello said.
"If I was American I'd feel really angry that Main Street bailed out Wall Street, we didn't have that here.
"Macquarie Fields did not bail out Martin Place".
While acknowledging public anger toward the banking system, Mr Costello said it was up to the bank executives to engage with the community.
"Until you diagnose what they're angry about, how can you fix it?," he said.
