The prime minister acknowledged conduct issues needed to be addressed, but urged the banks to keep the "animal spirits" of the economy alive by continuing to offer credit.

"We can't be scared of our own shadows," he told business leaders in New York.

"Capitalism needs to be fuelled and it needs the support of a healthy and vibrant banking sector which can lean into that."

Mr Morrison said there was never any issue with the "rigour and soundness" of Australia's banks.

"We have, I would argue, the best banking system in the world," he said.

"The most resilient, the most strong. But there were questions about some of the conduct, and that conduct was obviously something that needed to be addressed."

He insisted the federal government was rolling out a range of reforms in response to the Hayne inquiry.

"While it's important to address those conduct issues within the banks, we've got to be very careful that we don't lead our banks into a place where they're being overly sheepish," Mr Morrison said.

"That can really cut off the opportunities that we would otherwise have."

Shadow treasurer Jim Chalmers told AAP the prime minister's comments did not amount to an economic plan.

"Saying banks should lend more is not exactly a plan to get the economy going again or to turn around the worst growth in a decade on the Liberals' watch," Dr Chalmers said.

"Obviously we want finance to flow and for confidence to be restored but that won't come from Scott Morrison being so dismissive about the serious issues which emerged from the royal commission he resisted for two years."

Australian Associated Press