Prime Minister Kevin Rudd should pull the big four banks in for a fireside chat, former treasurer Peter Costello says.
The Reserve Bank of Australia board will meet on Tuesday and is widely tipped to cut rates, but the global credit crunch means banks may not pass on the cut.
"Kevin Rudd ought to do what is required in the situation which is to call the banks in to make sure that the Australian public gets some relief out of any rate cut," Mr Costello said while appearing on the Nine Network's Mornings with Kerri-Anne Kennerley program.
Mr Costello said he regularly called the banks in for discussions when he was treasurer.
"They have already allowed the banks to increase their margin by half a per cent. The banks are now charging an additional half a per cent over and above the Reserve Bank rate."