Australian banks need to hold more capital to be able to survive future financial crises, says a new report.
There should also be minimum education standards for financial advisers, it said.
The report, released on Sunday, also recommended superannuation (pension fund) fees be reduced.
Bank competition, increased capital levels and inefficient taxes were singled out for reform by the Financial System Inquiry report.
The 320-page report was headed by the former chief executive officer of the Commonwealth Bank of Australia, David Murray.
The inquiry, launched in 2013 by Treasurer Joe Hockey, was charged with examining how the financial system could be positioned to support Australia’s economic growth and to better survive global financial crises.
It has made 44 recommendations relating to the Australian financial system.
It found that: “taxation and regulatory settings distort the flow of funding to the real economy; it remains susceptible to financial shocks; superannuation is not delivering retirement incomes efficiently; unfair consumer outcomes remain prevalent; and policy settings do not focus on the benefits of competition and innovation. As a result, the system is prone to calls for more regulation”.
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