SME blues

9 April 2013 By Neil Unmack Follow @unmack1

Mario Draghi has promised to consider all options to help small companies in Europe but his options are limited by the bank’s mandate and politics. Using third parties such as national central banks isn’t a panacea. The most the ECB can do is ease SME funding woes.

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Mario Draghi, president of the European Central Bank, said in a press conference on April 4 that the bank was studying ways of lowering funding costs for European small- and medium-sized companies. Draghi also hinted that action could be coordinated between national central banks and the European Investment Bank, without the ECB taking additional credit risk.
“When we come to look at the credit risk, it is quite clear that all these actors have a role to play,” Draghi said in response to a question on SME funding. “So I think we will continue thinking about these issues from a 360 degree perspective.”
Small companies in Spain and Italy pay about four percentage points higher rates than those in Germany, according to Deutsche Bank.

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