Inquiry should build financial trust: ICAA

The federal government's financial system inquiry should have a strong focus on building trust and confidence, accountants say.

The Institute of Chartered Accountants Australia (ICAA) says in its submission to the inquiry that it should also aim to enhance Australia's international competitiveness while boosting productivity and cutting red tape.

"The financial system inquiry needs to be proactive in identifying and preparing the economy for the next big shock wave, rather than looking to provide a retrospective fix," the institute's head of leadership and advocacy, Rob Ward, said in a statement.

He said the inquiry should focus on the need to build trust and instil confidence in the financial system.

"The responsibility to rebuild trust lies with financial services providers and is the key to delivering a higher level of engagement between consumers and their savings," he said.