As if the growing currency tension and pressing financial reforms weren't enough for the ongoing G20 summit in South Korea, the global economic forum had a taste of a domestic spat underway between the Australian government and the country's banking sector.

Prime Minister Julia Gillard is attending the Seoul gathering of leaders of the world's largest economies who are aiming to prevent the recurrence of the global financial meltdown that paralysed a number of major economies in 2008.

However in her speech, Ms Gillard used the occasion to hit on Australia's major banks for imposing mortgage rates that breached the policy decisions of the country's Reserve Bank of Australia (RBA), singling out the home loan rates move of the Australia & New Zealand Banking Group (ANZ).

Ms Gillard told her audience that Australia is in the middle of a banking debate that mainly hovers on policy rate differences with the country's major banks, which she said prompted her government to introduce measures that would allow the growth of healthier competition in the industry.

The prime minister stressed that the planned banking reforms in Australia were mostly aimed "to better empower consumers to move away from banks when they are unhappy with their banking arrangements and believe that they are being ripped off."

Ms Gillard's pronouncements coincided with mounting global concerns on reforms that would improve the rules and regulations surrounding the international financial institutions and systems, in light of the problems that caused serious setbacks on the worldwide banking industry for the past few years.

Notwithstanding the severity of the issue that almost brought Wall Street down to its knees, global banks and including Australia's four major banks were fearful of any government measures or interventions that they deem would discourage better yields and profitability in the sector.

On his part, ANX chief executive Mike Smith, who heard first-hand the criticisms delivered by Ms Gillard, appealed for calm on the raging issue, calling instead for "quality debate around it rather than perhaps a note of statements," obviously taking a swipe on the Australian leader.

Mr Smith conceded that it was too easy to be emotional on the banking debate as he stressed that enlightening consumers on bank works proved to be very difficult and more so convincing the Australian government that ANZ's rate hikes beyond the RBA's adjustments were necessary for its survival.

The G20 summit so far is locked in a heated currency differences among trading nations as a number of countries hurled accusations, particularly on China, of deliberately keeping their currencies at low levels in order to preserve their edge in the export market.

As world leaders clash on policy issues, Ms Gillard called on the G20 leaders to devise ways in avoiding the escalation of the ongoing currency wars and instead focus on promoting further the proliferation of free trade.