The four major banks enjoyed a $20 billion gain on the share market on Tuesday after royal commissioner Kenneth Hayne QC decided against recommending radical structural reform of the banking industry.

Ratings agency Moody's was among those predicting the move to a fees-for-service paid by borrowers to mortgage brokers will affect competition.

"We expect this change will consolidate the market position and pricing power of the four major banks," Moody's said.

Treasurer Josh Frydenberg also said making customers pay would benefit the big banks.

"In effect you would be putting the mortgage brokers out of business and giving that business to the big banks," Mr Frydenberg said.

"We don't want to give the big banks a free kick."

Finance Brokers Association of Australia managing director Peter White said if implemented, Mr Hayne's recommendations would send the country "back to the dark ages where a few banks held all the power".

"The full swing of implementations would devastate an industry, push interest rates up because competition will be reduced in the marketplace, service standards will be eroded and the borrower will lose out big time," Mr White said on Tuesday.

UBS banking analysts said Mr Hayne's final recommendations fell well short of market expectations, saying the report was disappointing and a clear win for the banks.

The analysts said the large amount of misconduct publicly exposed by the royal commission would likely ensure the banks changed their behaviour in the short term.

"However, despite regulators being given greater oversight powers, most of the cultural change will be self-enforced," they said.

"Without powerful recommendations, we are concerned that ensuring lasting cultural change over the years may be difficult, especially as management and boards rotate."

Australian National University expert and former federal Liberal leader John Hewson also warned the banks may drift back to their "old ways" without a fundamental change in culture.

"While the royal commission may shake up the banking sector for a while, seeing the termination of extreme abuses and other bad behaviour, perhaps with some significant civil and criminal penalties, it may do little to change the basic bank 'culture' that has been fundamental to this environment," Dr Hewson said.

"Bank boards are yet to recognise and accept full ultimate responsibility for setting a culture that focuses on the maximisation of profits and shareholder value at the expense of customers, and other stakeholders."

He said boards agreed on the strategy, appointed the CEO to deliver it, and approved the related remuneration structures.

"A fish rots from the head," Dr Hewson said.

Mr Hayne criticised some bank bosses for being unwilling to recognise and accept responsibility for the poor conduct, saving his harshest criticism for National Australia Bank CEO Andrew Thorburn and chair Dr Ken Henry, a former Treasury secretary.

An upset Mr Thorburn vowed to stay on to lead the changes at NAB, insisting both he and Dr Henry were doing the right thing, fixing mistakes and putting customers first.

Australian Associated Press