Australian Prime Minister Malcolm Turnbull says in hindsight it would have been better for the government to have set up a banking royal commission two years ago.
Mr Turnbull and his senior colleagues have spent the past two years arguing against holding a royal commission into the financial sector, although some of his backbenchers were campaigning vigorously for a royal commission to be held.
Mr Turnbull finally called a royal commission late last year and the shocking revelations have emerged as it has been taking evidence.
The Government's misjudgement on the need for a banking royal commission has come back to bite it, writes Michelle Grattan.
Mr Turnbull has taken responsibility for not calling the formal inquiry earlier.
"Politically, all of the commentators are right when they say we would have been right to establish one earlier," Mr Turnbull said overnight while on a visit to Germany.
His position is at odds with the Financial Services Minister Kelly O'Dwyer, who yesterday repeatedly refused to acknowledge the inquiry should have been established earlier.
Nationals senator John "Wacka" Williams is one of those who was insisting for years that a royal commission was necessary.
He said those who previously opposed the inquiry should now do as former Nationals leader Barnaby Joyce has done and admit they were wrong.
Senator Williams said despite his long-standing insistence that a royal commission was needed, he was still shocked at the evidence that has been given about wrongdoing.
And he said he expected more scandals to emerge as it continues.
While Mr Turnbull conceded it was wrong politically to delay setting up the royal commission, he had not apologised and instead moved to explain why he had waited.
The PM said he had "called out the unacceptable behaviour of the banks in a speech two years ago".
"And I talked about how there had been a failure to put customers first and that the culture of the financial services sector was not delivering on their fundamental fiduciary obligation to put the customers first," Mr Turnbull said.
He argued that it would have been harder to make immediate regulatory changes to the sector if a royal commission was underway.
"My concern was that a royal commission would have gone for several years, that has generally been the experience and people would then say 'you can't reform, you can't legislate you've got to wait for the royal commissioner's report'."
He said it was better that there had been changes made over the past two years, including toughening penalties, strengthening ASIC and setting up a one-stop shop for consumer complaints.