Removing Information Barriers to Investment in SMEs

Published in: 

Following the European Commission’s public consultation on the Capital Markets Union (CMU), which it launched in January with a view to completing the midterm review of the CMU by June 2017, the European Capital Markets Institute (ECMI) organised a lunchtime seminar at CEPS on February 8th to discuss the Commission’s strategy. The seminar aimed to take a critical look at the strategy and to explore alternatives.

It was argued that the Commission should switch from self-regulation to a market driven approach, with market-building measures, greater emphasis on policies of quasi-mandatory information sharing, and market-correcting measures, for example. Another topic of discussion was the importance of feedback provided by banks to SMEs, the heterogeneous landscape across Europe in terms of credit information systems, and the role of SMEs as distributors of data and information. Moreover, the ECB’s Ana Credit initiative was presented, which aims to improve information on credit developments in the euro area by providing harmonised ‘granular’ data on credit and credit risk; no granular information (e.g. lender’s and borrower’s identity, balance sheet, etc.) will be disclosed to users outside the ECB and participating NCBs.

By way of conclusion, delegates noted that there is still room to improve the quality of feedback; that technology can play a better role in matchmaking platforms and that the principle of proportionality should be kept in mind because not all SMEs are interested in seeking alternative sources of funding.