Basel’s unlikely victim: venture capital

Changes to credit risk framework could block alternative path for EU banks to finance SMEs

Every politician and government would want you to know they support the real economy. Banks have the financial firepower, but they are not well suited to the task of funding small and medium-sized enterprises (SMEs). In particular, technology driven companies that do not have easily transferable property or machinery to mortgage struggle to access bank debt directly and need equity instead.

“Banks are the principal form of funding for SMEs in Europe, but, increasingly, they’ll find it difficult