Finance Access of SMEs, Monetary Dialogue, July 2013

Estudio 13-12-2013

The notes in this compilation examine the challenges stemming from the accessto finance of SMEs and discuss available policy options to address the problem. The notes include a review of recent proposals put forward by the ECB, the European Investment Bank and the European Commission to support private lending to small and medium size enterprises (SMEs). Experts broadly agreed that the current fragmentation in financial markets is largely the result of severe market failures (externalities) in the allocation of key inputs, including finance. High unemployment and externalities would argue in favour of public intervention for a greater and easier access to finance for SMEs. However, past experiences have shown that without repairing bank balance sheets and resuming economic growth, targeted initiatives to help SME financing - particularly in distress EU countries - will have limited success. Ultimately, it is the improvement in financial markets and the return of trust that will make the difference. To this purpose, a rapid conclusion of a full and genuine banking union was considered to be key.