FSB report on effects of Basel III reforms on SME financing

Regulatory Updates | 29/11/19

The Financial Stability Board (FSB) has published Evaluation of the effects of financial regulatory reforms on small and medium-sized enterprise (SME) financing: Final report. The report examines the effects of the post-financial crisis G20 reforms, including the Basel III capital and liquidity agreements agreed in 2010, on the financing of small- and medium-sized enterprises (SMEs). The FSB finds that the reforms in the scope of the report did not have material and persistent negative effects on the financing of SMEs, however there is some evidence that the more stringent risk-based capital requirements slowed the pace of – and in some jurisdictions tightened the conditions of – SME lending at banks that were least capitalised ex ante relative to other banks.