Australian government authorities can only warn banking institutions to temper their rate increases, thus, banking reforms and new rules are now being considered to be in place to protect the public.

Treasurer Mr. Wayne Swan has admitted that the current banking laws limit what governments can do after banks and other financial institutions slapping higher rates compared to what was imposed by the Reserve Bank of Australia as benchmark rates.

This was the reaction of the Treasurer Swan after the the Commonwealth Bank of Australia and New Zealand adjusted its lending rates immediately and more than that of the RBA's at 45 percent.

"Those reforms can't deal with some of the arrogance we have seen ... We need reforms to increase competition in the banking sector, and we also need a change of attitude from some of our senior executives," Mr. Swan said.

He added that there was no justification for such a move as borrowing costs for banks went back to normal.

He called the Commonwealth's move a ''cynical cash grab'' and the bank ''arrogant''.

''It's no wonder Australians are so angry with our banks after watching the behaviour of the Commonwealth Bank,'' he said.

Mr. Swan said reforms to increase the current competition in Australia's banking industry will now be pursued and would be revealed in a month.

Last month, he saw no need for these reforms in the industry, but with what has happened Mr. Swan saw it necessary to consider reforms to protect Australian consumers.