Financial cops will be expected to crack down on dodgy banks with newly-expanded powers after the government confirmed they had been too "timid".
Treasurer Josh Frydenberg has promised action on all 76 recommendations coming out of the banking royal commission's final report, which was released on Monday.
It found shocking evidence of misconduct and greed in the Australian financial sector, at the expense of customers and businesses.
"From today the banking sector must change and change forever," Mr Frydenberg told reporters in Canberra on Monday.
"The price paid by our community for this misconduct is immense, and goes beyond just the financial."
The regulators, who copped criticism for being too weak on financial institutions, will be given more resources and stronger powers.
"I think the regulators have also got the message and that timidity that we may have seen in the past is going to be replaced with a front foot approach," Mr Frydenberg said.
The two key regulators - the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority - say they are already reviewing their enforcement tactics.
The treasurer said the attitude at ASIC had been to negotiate with banks rather than chase them through the courts, but he expected that to change.
The government, which had held off against the royal commission as unnecessary, finally relented to pressure to call it late in 2017.
But Nationals Senator John Williams, who first called for a banking royal commission in 2009 and kept pressure on the coalition to hold it, is worried the cycle will start again.
"This is all good now, the board of directors know they've got to lift their game, the CEO and CFOs know they've got to do better," Senator Williams told Sky News.
"However, what's it going to be like in 20 years time? Does there need to be compulsory, mandatory code of conduct in the industry to see that the right-doing continues on for decades?"
Shadow treasurer Chris Bowen said Labor would support all 76 recommendations in principle, in what he called a "sobering report".
He warned the government against weakening its response to the report, and said Labor was ready to immediately change laws with bipartisan support.
"The Liberals have shown they cannot be trusted to clean up the banks," Opposition Leader Bill Shorten said in a statement.
Influential Senate crossbenchers Pauline Hanson and Derryn Hinch said criminal charges should be laid against those found to have done the wrong thing.
Australian Associated Press
