The competition watchdog today joined the campaign for closer regulation of Australian banks.

The big four, which control more than 80 percent of the home-loan market, have hinted they may have to move faster than the central bank's official cash rate increases to offset higher funding costs that they say are hurting margins.

Australian Competition and Consumer Commission Chairman Graeme Samuel told the Australian Financial Review on Friday "We are starting to get concerned about price signalling."

According to him, lenders announcing their intentions about interest rate movements could almost be anticompetitive behaviour and the subject of possible action.

Mr Samuel did not want to define the activity as public collusion, but said it is a public semaphoring of intentions and the ACCC is concerned about this. He said he lacked the power to tackle price signalling, a subtler form of collusion whereby banks publicly indicate to rivals their future interest-rate movements.

On Thursday, the Coalition called for curbs on bank profits and lending rates, saying controls were needed to stop them gouging their customers.

Opposition shadow treasurer Joe Hockey on Thursday demanded Treasurer Wayne Swan to compel Australian banks to follow the adjustments put forward by the Reserve Bank.

The political ruckus over interest rates comes two weeks after the Reserve Bank surprisingly held off lifting its key cash rate.

With Reuters