The Australian Securities and Investment Commission has launched legal action against National Australia Bank “for unconscionable conduct and market manipulation”, which Labor says shows the need for a royal commission into the financial sector.

“The watchdog is on the job. The watchdog is sinking its fangs into a few suspected culprits and doing his job,” the Prime Minister told reporters on the NSW south coast today.

Opposition Leader Bill Shorten is worried about consumers, including mortgage holders and self-funded retirees, being ripped off.

“It is a scandal that three of our four banks are now being investigated for rate rigging,” he told reporters in Brisbane today.

“You can vote Liberal and have a cover-up or you can vote Labor and have a banking royal commission.”

Shadow treasurer Chris Bowen told ABC radio the Opposition was interested “not only in the illegality but the culture which allows this sort of behaviour … you see a contempt … by people making key decisions on interest rates”.

-AAP