The existing capital framework for banks developed by the Basel Committee for Banking Supervision - transposed in EU law via two adaptations of the Capital Requirements Directive (the CRD III and the proposed CRD IV and CRR) - aims at strengthening prudential banking rules. In addition to requiring more and higher-quality capital, it imposes higher capital charges for market activities and enhances rules on the management of liquidity risk. This will provide for enhanced financial stability, more robust banking business models and stronger balance sheets.
In the CRD IV, the current prudential treatment of SME loans will continue to benefit from the provisions of Basel II (a preferential risk weight for SMEs exposures of 75 per cent under the standardised approach). An even more beneficial regime for exposures to SMEs would require a revision of the international Basel framework. It would especially require demonstrating that the current approach is too stringent. This is why the risk weight for SMEs exposure is subject to a review clause in the Commission's proposal.
The Commission, consulting the European Banking Authority (EBA), will, within 24 months after the entry into force of the new Regulation, report on lending to SMEs and natural persons. It will submit its report to the European Parliament and the Council, together with any appropriate proposal concerning the review of the SMEs' risk weight. In this context, the EBA is requested to analyse and report by 1 September 2012 on the current risk weights, testing the possibilities for a reduction, taking into consideration a scenario of a reduction by one third in relation to the current situation.
Based on the report from EBA and its recommendations, the Commission will consider appropriate measures addressing the issue of SMEs risk weighting in the context of the CRD IV and CRR framework.
Action plan to promote better access to finance for SMEs
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