This study discusses the main characteristics of the SME sector in Europe and provides an informative analysis about what Basel II means for SMEs and its impact on their credit financing conditions. It also presents a detailed analysis of how banks formulate an internal rating system and illustrates how this system works in practice. Finally, it concludes with the key measures that should be taken by banks, SMEs and public policy-makers to improve SME financing in the new rating culture.

After almost seven years of hard work to produce a new substantive piece of legislation updating the current banking regulation for European credit institutions and investment firms – the Capital Requirements Directive (CRD) – it looks like its timely adoption is still uncertain. The main problem is the dissatisfaction of Parliament with its limited role in the Lamfalussy process in general and in the CRD in particular, which has led it to suspend ‘temporarily’ the comitology provisions of the CRD, casting doubt over the future ability to amend the legislation.

Much has been achieved on the EU Financial Services Action Plan but challenges remain to make the single financial market work. In this report, the highly successful CEPS Task Force on the post-FSAP agenda presents its 10 policy recommendations aimed at responding to those challenges. The fundamental issues of implementation and enforcement are considered, along with refinements to the EU’s regulatory, supervisory and crisis-management frameworks.

The new Basel Capital Accord and the EU’s Capital Adequacy Directive have sparked concerns that higher capital charges will further curb lending to SMEs. In this respect, the new regulatory banking framework could also worsen the effects of the long payment delays which typically undermine SMEs’ commercial transactions. In fact, cash imbalances due to late payments might cast additional doubt on small firms’ creditiworthiness and, as a consequence, hamper their access to credit.

The banking sector in Europe is at a turning point in its history. This research report provides a complete and up-to-date picture of the consolidation process that took place in the European banking industry during the 1990s and offers a structural, economic and strategic analysis of the sector. The authors also identify new challenges facing supervisory authorities and their likely responses to ensure financial stability.

The purpose of this report is to provide a detailed, up-to-date and critical analysis of the New Basel Capital Accord framework. It focuses on the limitations and pitfalls that may deserve further investigation, particularly at the European level. Moreover, it provides a provisional assessment of its effects on small- and medium-sized European banks, as well as small- and medium-sized European enterprises. It examines the procyclicality of the new Accord and offers mechanisms to counter it. Finally, it addresses the challenges of implementing the new rules at the EU level.

After the adoption of the EU pension funds directive, the regulatory framework for asset management in the EU is complete. The single licence and home country control will now be applicable across the board for the different lines of asset management business. However, considering that asset management can be governed by 5 different regulatory regimes in the EU: banking, investment services, insurance, pension funds and investment funds, some parties have started to argue for a horizontal asset management directive as a single regime for all asset management business.

Since the 1960s, the EU has tried to forge a legal regime for investment services. These efforts have been marred by controversy, with views diverging on the appropriate level of competition in the field of securities trading. In November 2002, the Commission presented its proposal for a revised Investment Services Directive (ISD), the latest part of these efforts.

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