The special status of banks and insurance companies within economies must come with regulation and an unwritten expectation of social responsibility, Productivity Commission Chairman Peter Harris says.

The commission last month released a draft report on competition in financial services, in its first broad look at the sector.

“There is a lot of money, pride and power tied up in finance,” Mr Harris said in a speech last week. “And a lot of system awareness for us to pick up in a short time.

“Yet we believe there is value in the occasional analysis from the ground up, taking nothing for granted, as is our special skill.”

Mr Harris said it was inevitable that, having been subject to so many inquiries recently, parts of the industry reacted “with weary resignation” to the Productivity Commission review.

Draft recommendations include selecting a “competition champion” from the current regulators, in a proposed rebalancing after the focus shifted to system stability following the global financial crisis.

The Australian Competition and Consumer Commission (ACCC) says it is well placed to take up the role – although it is not a member of the Council of Financial Regulators – because it received funding last year to set up a Financial Services Unit.

“Whatever mechanism or process is ultimately adopted, the ACCC is firmly of the view it is important for competition to be given greater significance in the regulatory decision-making process,” ACCC EGM Specialised Enforcement and Advocacy Marcus Bezzi said at a public hearing on the draft report last week.

The Financial Services Unit’s focus will shift from an initial mortgage pricing report to other areas from July, with the agenda likely to be influenced by the Productivity Commission report.