The initiative comes as concern grows over the likelihood of sharp “deleveraging” across the European banking sector. The International Monetary Fund predicted last month that banks would shed €2 trillion of assets over the next 18 months, potentially damaging a fragile eurozone recovery.
Under the plans, banks would merely act as lending intermediaries – helping to pool SME loan exposures for the funds and providing credit assessments – in return for a fee of up to 3 per cent for the banks.
Such a move might ease funding problems for SMEs. But it could also stoke regulators’ growing worries over an even larger part of the credit business moving into the lightly-regulated shadow banking space.
Martin Horne, managing director at Babson Capital Europe, said given that European companies had been used to cheap bank financing in the past, prices for such loans were still too low. “We are keeping an eye on this as it would be a natural fit with the rest of our business model”, he said. “But you have to make sure that you get paid for the lack of liquidity and the higher risk of lending to small companies.”
The news came as it emerged that the European single market commissioner, Michel Barnier, and Antonio Tajani, vice-president of the commission, had written to the European Banking Authority watchdog, expressing their concern about the impact of new global capital rules on SME lending. They asked the EBA to produce an “in-depth analysis” of the impact on access to credit for SMEs “whose key role in the growth of our continent you are well aware of”.
The launch of such lending schemes in Europe would mimic the US market, where banks play a lesser role in directly financing companies, though bankers said the European model could extend to far smaller SMEs.
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