Does Recent Regulation Improve (or not) the Spanish Mutual Guarantee System?

Clara Cardone-Riportella and Marta Garc a-Mandaloniz
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Clara Cardone-Riportella: University Pablo de Olavide, Carretera de Utrera s/n, ES 41903, Seville, Spain,
Marta Garc a-Mandaloniz: Carlos III University of Madrid, Calle Madrid, 126, ES 28903, Getafe, Madrid, Spain
Authors registered in the RePEc Author Service: Clara Cardone Riportella

International Journal of Economics and Financial Issues, 2017, vol. 7, issue 1, 515-523

Abstract: This paper aims to analyse the new regulation framework and its impact on the Spanish mutual guarantee system (MGS), especially on the cost of the guarantee. The main conclusions are that the reforms which were introduced do not directly affect the reduction of this guarantee cost. Nevertheless, in our opinion, the regulation has strengthened the mutual guarantee system during the crisis as a result of the banks generating confidence to this financial intermediary, which helps to correct credit market failures. Currently, banks are more likely to recognize the role of the mutual guatentee society (MGS) and the declining risk involved thanks to the guarantee offered by the MGS that exhibits stronger solvency, liquidity and good governance policies.

Keywords: Small Business Regulation; Mutual Guarantee System; Guarantee Cost (search for similar items in EconPapers)
JEL-codes: D82 G21 G30 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ1:2017-01-65

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