Banks appear likely to escape further small business regulation following the closing submissions of round three of the banking royal commission on Friday.

Counsel assisting the royal commission recommended no additional statutory obligations should be imposed with respect to making loans to small business.

Counsel assisting Michael Hodge said the causes of the failings of the business case studies considered by the commission were multi-faceted.

“The performance of a business is dependent on many factors,” he said.

Mr Hodge said any increase in regulatory requirements on banks to scrutinise the "optimism" of a small business borrower would have to be premised on the banks being "too optimistic" in lending to small business now, when the case studies and evidence before the commission showed this was not the case.