Basel III and SME access to credit: Evidence from France

Thomas Humblot ()
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Thomas Humblot: Larefi, Université Bordeaux IV

No 1406, Larefi Working Papers from Larefi, Université Bordeaux 4

Abstract: This paper investigates Basel III potential effects on SME access to bank credit. In an innovative empirical framework, French small firms are studied using microdata over the 2008-2013 periods. We conclude that the new regulation will have an M-shaped impact. Eventually, Basel III eliminates low profitable exposures regardless of their regulatory charge alleviations, restricts risky positions despite of their profitability and digs SME funding gap. Only regulatory adjusted dominant risk/return profiles are funded. On average, no reduction in credit maturity nor in volume is observable. The overall effect ultimately depends on banks’ initial position.

Keywords: Basel III; regulation; Small and Medium-sized Enterprises; credit access; fixed effects model. (search for similar items in EconPapers)
JEL-codes: C23 E51 G18 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2014-12
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