Prime Minister Malcolm Turnbull has dismissed the Opposition's calls for a royal commission into the banking and finance sector, describing the idea as a "thought bubble".

Key points: Malcolm Turnbull says regulators already have powers to keep banks in check

Malcolm Turnbull says regulators already have powers to keep banks in check Resources Minister Josh Frydenberg says calls for banking inquiry a "distraction"

Resources Minister Josh Frydenberg says calls for banking inquiry a "distraction" Shorten says a Labor Government would hold inquiry into finance sector

Opposition Leader Bill Shorten has vowed to establish a two-year $53-million public inquiry into the financial sector if his party is elected to government.

Mr Shorten said a "string of scandals" had proved it was necessary, but the Government has resisted pressure.

But the Prime Minister said that strong measures were already in place to ensure that the banking and finance sector was kept in check.

Mr Turnbull said that regulators — Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC) — already had significant power.

"It has all of the powers to enquire of a royal commission but it also has the powers to prosecute and take action, which it is doing," he said.

"It has banned people from the industry, it has enacted fines — it's a very active regulator."

Mr Turnbull also dismissed Mr Shorten's call for a royal commission as a "thought bubble", a comment echoed by his Resources Minister Josh Frydenberg.

Mr Frydenberg told the ABC the Government was concerned about the culture in banks, but his party's reforms may need time to work.

"This is just a distraction from Bill Shorten," he said.

"He has shown he's not prepared to listen to a royal commission with the Australian Building and Construction Commission. So I just think this is a bit of populist politics."

Immigration Minister Peter Dutton echoed his colleague's comments, saying the Opposition were bringing out "a stunt a day".

Mr Dutton also dismissed the suggestion that the Prime Minister's recent comments on banks were "rhetoric", telling Sky News that existing regulators already had enough power to keep the banking and finance sector in check.

"It is important to recognise that the banks to the wrong thing and in cases where they don't abide by their codes or they expose clients to unnecessary risk, they should be held to account for that," he said.

"It is the job of the regulator."

But Queensland Nationals MP George Christensen said a royal commission is needed, slamming the banks' treatment of farmers.

NSW Nationals senator John Williams and Liberal MP Warren Entsch have also backed calls for a royal commission.

Mr Shorten said a public inquiry would rebuild trust in banks.

"Many Australians have suffered through the decisions of banks and financial institutions," he said on Friday.

"There are literally tens of thousands of victims, if not more … enough is enough. This string of scandals has to stop."