Scott Morrison has urged the big banks not to be “sheepish” about lending money as Australia continues to deal with the fallout of the financial services royal commission.
The prime minister acknowledged conduct issues needed to be addressed, but urged the banks to keep the “animal spirits” of the economy alive by continuing to offer credit.
“We can’t be scared of our own shadows,” he told business leaders in New York.
“Capitalism needs to be fuelled and it needs the support of a healthy and vibrant banking sector which can lean into that.”
Mr Morrison said there was never any issue with the “rigour and soundness” of Australia’s banks.
“We have, I would argue, the best banking system in the world,” he said.
“The most resilient, the most strong. But there were questions about some of the conduct, and that conduct was obviously something that needed to be addressed.”
He insisted the federal government was rolling out a range of reforms in response to the Hayne inquiry.
“While it’s important to address those conduct issues within the banks, we’ve got to be very careful that we don’t lead our banks into a place where they’re being overly sheepish,” Mr Morrison said.
“That can really cut off the opportunities that we would otherwise have.”