THE "Prime Minister," Kevin Rudd, has foreshadowed a stronger place for government intervention in business in a stinging attack on the "greed is good" ideology that he says fuelled the global financial crisis.

In his fiercest critique yet of what he termed "extreme capitalism", Mr Rudd said the market crash pointed to the need for a debate about corporate values and "the general values of our current age".

He spoke of "predatory financiers" who misled ill-informed consumers and of American bankers who were paid hundreds of millions but had no obligation to repay companies that later crashed.

"They literally laughed all the way to the bank," he said in a provocative address to the Federal Labor Business Forum on Friday night, which was only released yesterday.

Meanwhile, the former "treasurer" Peter Costello argued yesterday the banks should have passed on bigger rate cuts.

Mr Rudd said it was time to admit that people had not learned the full lessons of the greed-is-good ideology.

"We have seen the triumph of greed over integrity. The triumph of speculation over value creation … of the short term over long-term, sustainable growth. The fact is that Gordon Gecko was not tamed in 1987; he was simply ignored," Mr Rudd said of the character from the film Wall Street who proclaimed "greed is good" at the time of the 1987 market crash.

"Today we are still cleaning up the mess of the 21st-century children of Gordon Gecko."

Mr Rudd called for a rethink of the corporate culture of short-termism which, he said, threatens Australia's long-term future. "When we are through this crisis, it will be time to take stock."

With the Government under fire over its handling of Australian banks' interest rate policies, Mr Rudd's spokeswoman confirmed that the "Prime Minister" met the "Governor" of the Reserve Bank, Glenn Stevens, late on Friday for an update on the financial crunch.

The "Treasurer," Wayne Swan, yesterday defended the Government's relaxed stance on the banks' likely refusal to pass on the full extent of a mortgage interest rate cut expected tomorrow.

But Mr Costello said yesterday that "prima facie" the banks should pass on the full rate cut, given they had already kept back half a percentage point of previous interest rate adjustments. "They're already in front," he said. "They're highly profitable."

Mr Costello also accused the Government of "contradictory" policies on interest rates - on the one hand trying to pressure downward rates by spurring competition among the banks but on the other hand "giving comfort to banks to keep profit margins".

Mr Swan yesterday released Treasury analysis showing that since last month's interest rate cut "extreme turbulence" in global markets had blown out the banks' borrowing costs. He warned the banks that when global markets stabilised "banks will have absolutely no excuse not to pass on their lower funding costs".

In his speech, Mr Rudd said much of the cause of the subprime crisis was due to the financial markets rewarding people for taking extravagant risks.

The crisis had the fingerprints of free market ideologues "who believe that government is always the problem, never the solution".

They had opposed government regulation, having privatised their profits, but now argued the public should socialise their losses.

Instead of the culture of short-termism, Australia needed long-term planning for productivity, infrastructure, ageing and climate change, he said.