Australia's shadow treasurer, Malcolm Turnbull, does not think Treasurer Wayne Swan has the power to force banks to lower interest rates.

The treasurer says he will take action if banks refuse to pass on to customers any cut in official interest rates , but would not elaborate on what his action will be.

Shadow Treasurer Malcolm Turnbull says he thinks Mr Swan is making threats he can't carry out.

"The reality is that the banks are free to set their interest rates, the commonwealth, what's he going to do," he said.

"I have no idea what he's going to do,and I am not going to speculate on what Mr Swan might have in his mind, if he's got anything in his mind at all."

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