Here is the summary of the findings of the consultative report: “…the analysis thus far does not identify material and persistent negative effects on SME financing in general, although there is some differentiation across jurisdictions.
There is some evidence that the more stringent risk-based capital (RBC) requirements under Basel III slowed the pace and in some jurisdictions tightened the conditions of SME lending at the most ‘affected’ banks (i.e. those least capitalised ex
ante) relative to other banks. These effects are not homogeneous across jurisdictions and they are generally found to be temporary.” These results are not that surprising for many observers. They come on the background that regulatory subsidies such
as the SME supporting factor in the EU have not really helped SME lending as well as previous findings that higher capital requirements negatively affect private second lending at most in the transition period if at all. One important caveat to keep
in mind is the heterogeneity across the different FSB jurisdictions, some of which recovered relatively quickly from the Global Financial Crisis, while others took much longer or went back into recession, while introducing regulatory reforms. There are
also significant differences in banking sector structures across banks, in terms of ownership and market structures.