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Labor reserves banking tribunal position

AAP logoAAP 6/10/2016 Elise Scott

Federal Labor isn't ruling out backing a tribunal to help victims of bank misconduct but still insists a royal commission is the only way to properly investigate the sector.

Prime Minister Malcolm Turnbull confirmed on Friday his government would set up the tribunal, wrapping up a week of parliamentary testimony by the big four banks.

But the structure and scope of the new body won't become clear until after a review of the banking system by University of Melbourne law professor Ian Ramsay.

Labor isn't convinced another tribunal is a good idea but is reserving its position.

"Don't get suckered into thinking that this tribunal is new whiz-bang resolution to everything," opposition financial services spokeswoman Katy Gallagher told reporters in Canberra.

"I don't think the PM himself knows how it will work."

Senator Gallagher insists a royal commission is the only way to look at what Labor says are systemic issues across the entire sector.

Banking CEOs were subjected to three hours of questioning by a parliamentary committee in Canberra this week in a coalition government move to stave off the push for a commission.

Banks can be recalled annually and the prime minister says they could be fronting the same committee in 30 years.

He insists the commitment to a tribunal for victims - which several banks agreed to - shows his government was serious about banking misconduct.

"We will get a low-cost, speedy tribunal to deal with these types of customer complaints against banks and this will be real action," Mr Turnbull told FIVEaa radio on Friday.

"This is an example of my government governing, taking action now, dealing with these problems now, not kicking them off into the long grass."

But Senator Gallagher said there were already three tribunals being reviewed by Mr Ramsay.

"You can't just pretend that a tribunal for people who have been burnt by the system is going to fix all of the issues that were discussed here this week because it simply won't," she said.

The Greens believe the announcement is another distraction from the need for a "deep dive" review of the system.

"Unless the ground is shaken, nothing will fall from the tree for victims of white-collar crime and misconduct," Greens senator Peter Whish-Wilson said in a statement.

"They will likely be given more false hope and dragged through the mud again."

Former prime minister John Howard has dismissed calls for a commission as "ridiculous".

"It's astonishing to even consider a royal commission into a really safe and well-run banking system," he told The Australian.

Mr Howard said Australia had a well-run and profitable system that helped the nation through the global financial crisis better than anywhere else.

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