EBA欧洲银行-PH-presentation-EBA-SME-Discussion-Paper_12页_1mb

EBA Call for Evidence and Discussion Paper on SMEs Summary

1. Core Content

The European Banking Authority (EBA) published a Call for Evidence and Discussion Paper on SMEs in September 2015, as part of its mandate under Article 501 of the Capital Requirements Regulation (CRR). The purpose of this document is to assess the impact of the SME Supporting Factor (SF) on SME lending, riskiness, and the consistency of own funds requirements with these outcomes. The EBA aims to provide input to the European Commission's report on the impact of own funds requirements on SME lending, which is due by 28 June 2016.

2. Main Points

2.1 SME Riskiness Over the Cycle

• SMEs are generally perceived as more risky than large companies, as evidenced by higher non-performing loan (NPL) ratios.
• In December 2014, the EU-wide weighted average NPL ratio was 6.5%, with SMEs in the NFC sector having an NPL ratio of 18.6% compared to 9.3% for large corporates.
• SMEs tend to experience more severe deterioration in riskiness during downturns, particularly small firms.
• Medium-sized SMEs are relatively less risky and more stable in performance across the economic cycle.

2.2 SME Lending Trends and Conditions

• Lending to SMEs in the euro area has recovered since 2008 but has not yet reached pre-crisis levels.
• In 2014 Q4, SME lending accounted for about 28% of total bank loans to NFCs, close to the pre-crisis level of 30% (2003-2007).
• There is no consistent EU-wide dataset or definition for SME lending across the cycle, which complicates analysis.
• SMEs face more financing obstacles than larger companies, including higher interest rates and higher rejection rates.
• In 2009–2014, 30% of SMEs in the euro area did not receive full financing they needed, compared to 20% for larger companies.

2.3 SME Supporting Factor (SF)

• The SF is a capital reduction factor of 0.7619 for SME exposures that meet specific eligibility criteria.
• The SF was introduced to ensure that higher capital requirements did not negatively impact SME lending, serving as a transitional measure.
• The SF provides capital relief to banks, which increases their CET1 capital ratios. On average, 60% of institutions that applied the SF saw an increase in CET1 ratio of less than 0.2 p.p., with the overall total capital relief amounting to EUR 10.5 billion.
• The SF is concentrated in Italy, France, and Spain, which together account for 54% of the total capital relief.

3. Impact of SF on Lending

• The EBA aims to assess how the SF has influenced SME lending trends and conditions.
• Studies suggest a strong inverse relationship between capital requirements and lending, indicating that lower capital requirements may stimulate lending.
• However, it is difficult to isolate the effect of the SF from other regulatory changes introduced with the CRR.
• In Spain, a capital discount of 25% was introduced in September 2013, and an analysis found that this led to an increase in SME lending to both existing and new clients.

4. Key Questions

• Has the capital relief from the SF been used to support SME lending?
• If so, how? Through changes in capital allocation or loan pricing?
• Are the own funds requirements consistent with the riskiness of SMEs?

5. Next Steps

6. Data and Methodology

• The EBA uses supervisory data and BACH financial data to assess SME riskiness over the cycle.
• A composite index of five financial ratios (Profitability, Leverage, Activity, Liquidity, Coverage) is used to measure SME riskiness.
• An empirical study is being conducted using the SAFE survey to evaluate the credit supply effects of the SF in the EU.

7. Conclusion

The EBA is conducting a comprehensive analysis of SME lending, riskiness, and the impact of the SME Supporting Factor. The findings suggest that SMEs are generally more risky than large companies, and that they face greater financing challenges. The SF has provided capital relief, but its impact on lending is complex and influenced by other regulatory factors. The EBA aims to provide evidence-based insights to support the European Commission's report on the effectiveness of own funds requirements in promoting SME lending.