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Finance Access of SMEs: What Role for the ECB?

Ansgar Belke

No 430, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Small and medium size enterprises (SMEs) of southern euro-area economies (e.g. Italy, Spain) pay significantly higher borrowing rates than their peers of the core (e.g. Germany, France) and this divergence is widening. It is argued that severe market failures prevent SMEs in southern euro area countries from access to key inputs, in particular access to finance. This paper makes an assessment of feasible options to improve finance access of SMEs, available to EU institutions as well as to the ECB in the context of its price stability mandate. Because of nonnegligible moral hazard issues, the paper is sceptical about a stronger involvement of the ECB in the (indirect) financing of SMEs through the securitisation of banks`loans or their use as collateral for monetary policy operations. The paper concludes with some proposals for extending finance access of SMEs, including through mutual guarantee institutions along the lines recently pursued by the European Investment Bank.

Keywords: ECB; financial crisis; bank-firm relationships; credit guarantee schemes; monetary policy transmission; small business finance (search for similar items in EconPapers)
JEL-codes: E23 E51 G21 O16 (search for similar items in EconPapers)
Date: 2013
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Working Paper: Finance Access of SMEs: What Role for the ECB?* (2013) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:430

DOI: 10.4419/86788486

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