The stock fell up to 3.4 per cent on Thursday following a 3.3 per cent decline on Wednesday, just three weeks from an annual general meeting at which shareholders could deliver a second strike on executive pay and a board spill.

The sell-off meant Australia's second largest bank had, at one point, had as much as $6.2 billion wiped from its market capitalisation in a little over 24 hours since AUSTRAC's allegations were made public.

And Prime Minister Scott Morrison has said Mr Hartzer's future is in the hands of the Westpac board after the financial crime watchdog accused the bank of breaking money laundering and counter-terrorism financing laws more than 23 million times.

The claims include that the bank knew since 2013 of child exploitation risks associated with some payments to Southeast Asia but did not act appropriately until 2018 - and still does not monitor all channels for transfers potentially linked to the live-streaming of abuse.

"They should be taking this very seriously, reflecting on it very deeply, and taking the appropriate decisions for the protection of people's interests in Australia," Mr Morrison told ABC radio on Thursday.

In a hastily arranged media briefing late Wednesday, Mr Hartzer said he was "utterly horrified" by the allegations and accepted "the need for accountability" but refused to say whether he might quit.

Mr Hartzer, who has led Westpac since February 2015, blamed a combination of technical and human failings and said he had only been made aware of the matter a month ago.

That was before he answered MPs' questions in Canberra on November 8.

Mr Morrison said AUSTRAC had done its job and now the board and executive of Westpac needed to do the same.

"These are some very disturbing transactions involving despicable behaviour," he said.

Labor frontbencher Tanya Plibersek said the revelations were shocking, with the links to child exploitation particularly concerning.

"It can't be swept under the carpet and the management of the bank really do need to take responsibility for what's gone on on their watch," she told Sky News.

Commonwealth Bank's CEO quit after AUSTRAC in 2017 accused it of 53,000 breaches of money laundering and terrorism-funding laws.

CBA eventually settled the case for an Australian corporate record $700 million, suggesting that Westpac could face a huge fine after AUSTRAC applied to the Federal Court for civil penalty orders relating to 23 million breaches of law.

It could be a heavy financial blow for Westpac, which has already provisioned $1.4 billion for customer remediation during the past three years for issues including the fees-for-no-service scandal aired at last year's financial services royal commission.

Mr Hartzer told the House of Representatives' economics committee this month that Westpac could not rule out additional charges beyond FY20.

Rival National Australia Bank last week admitted it faced a huge fine for multiple possible breaches of counter-terrorism and anti-money laundering laws.

Shares in Westpac, which has five directors up for election at its December 12 AGM, dropped as low as $24.80 in early trade, their lowest since early February.

They rallied but still closed 1.99 per cent lower for the day at $25.16.

Australian Associated Press