Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/98658 
Authors: 
Year of Publication: 
2013
Series/Report no.: 
ROME Discussion Paper Series No. 13-10
Publisher: 
Research On Money in the Economy (ROME), s.l.
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 non-negligible 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.
Subjects: 
ECB
financial crisis
bank-firm relationships
credit guarantee schemes
monetary policy transmission
small business finance
JEL: 
E23
E51
G21
O16
Document Type: 
Working Paper

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