Trouble below deck

Despite weathering a number of storms over the past decade, notably reunification and monetary union, the German economy is facing a new threat. The small and medium-sized enterprises, once the bedrock of German economic stability, are experiencing serious financing difficulties as the cost of credit rises. Hardeep Dhillon asks whether securitisation is the answer.

Germany’s small and medium-sized businesses – Mittelstand – are worried that bank lending is set to become prohibitively expensive with the adoption of the new Basel banking regulations. So much so that there are suggestions of them using the asset-backed securitisation market to find funding to the tune of €50 billion within three to four years. Another false dawn for the Mittelstand ABS market or the beginning of something big?

The welfare of the engine room of the German economy, the