The Australian Securities and Investments Commission has approved a tougher self-regulated code of practice for the banking sector, which will extend protections to more small businesses and broaden the definition of financial difficulty.

ASIC chairman Joe Longo warned banks to “guard against the re-emergence of problems of the past – whether they be product types, incentive structures or attitudes towards customers – that led to the royal commission”, in a speech at an event hosted by the Australian Banking Association in Melbourne on Thursday.