Treasurer Josh Frydenberg has met with senior regulatory officials as the federal government seeks to shore up confidence in the financial system.

Mr Frydenberg met with Australian Prudential Regulatory Authority deputy chairs Helen Rowell and John Lonsdale in Sydney, just days after the Morrison government was returned to power.

One of the key tasks for the government will be responding to the recommendations of the royal commission into misconduct in the banking, superannuation and financial services industry.

The budget handed down in April included an extra $550 million in support for APRA and the Australian Securities and Investments Commission to tackle misconduct.

ARPA on Tuesday suggested banks change the way they assess customers’ ability to meet their mortgage repayments in a move analysts say will increase the amount people can borrow and could even stem the fall in house prices.

It proposed removing guidance that customers should be able to repay their loan if their interest rate increased to at least 7.0 per cent.

It suggested recommending lenders instead make serviceability calculations using a 2.5 per cent rate buffer.