News: WBC UPDATE 1-Australia's major banks call for government inquiry into the sector

(Updates throughout with more detail)

SYDNEY, Nov 30 (Reuters) - Australia's major banks on Thursday took the highly unusual step of calling for an inquiry into the financial system as a way to head off pressure for a powerful parliamentary commission into the scandal-hit sector.

The call was made in a joint letter sent by the heads of Westpac Banking Corp (WBC), Commonwealth Bank (CBA), National Australia Bank (NAB) and Australia and New Zealand Banking Group (ANZ) to Treasurer Scott Morrison.

"We now ask you and your government to act to ensure a properly constituted inquiry into the financial services sector is established to put an end to the uncertainty and restore trust, respect and confidence," the letter read.

"It is now in the national interest for the political uncertainty to end. It is hurting confidence in our financial services system," the banks said.

Australia's big banks have come under fire in recent months over scandals including providing misleading financial advice, insurance fraud and rate-rigging.

But the banks and the government until now had resisted building political pressure to call a wide-ranging Royal Commission - Australia's the most powerful investigative inquiry - into the sector.

The letter to the treasurer requests a "properly constituted inquiry," presided by an ex-judge, to probe banking, insurance, superannuation and shadow banking in the country.