This paper exami­nes how Basel III capi­tal reforms affec­ted bank len­ding to non­fi­nan­cial firms in Ger­ma­ny, with a focus on small and medi­um-sized enter­pri­ses (SMEs). Basel III may have par­ti­cu­lar­ly ham­pe­red the finan­cing of SMEs, sin­ce bank len­ding is their most important source of exter­nal finan­ce. We focus on the increase of mini­mum risk-based capi­tal requi­re­ments (RBC) and on the intro­duc­tion of the levera­ge ratio (LR), which ‑in simp­le terms- cor­re­sponds to the unweigh­ted capi­tal ratio. We mea­su­re the impact on len­ding volu­mes, matu­ri­ty and on col­la­te­ra­liza­ti­on. The ana­ly­sis builds on the Ger­man com­po­nent of a Finan­cial Sta­bi­li­ty Board (FSB) eva­lua­ti­on pro­ject. The pro­ject inves­ti­ga­ted the impact of the Basel III reforms on SME finan­ce and was published in 2019.

Quel­le: Basel III and SME bank finan­ce in Germany