The main risks of the Basel III framework in particular with regards to SMEs are:

■ Limiting the efficiency of SME lending.
■ The weak profits spread of the European companies limits their own flexibility to adapt to an increase in costs.
■ This is also going to prolong the structural trend of SMEs to reduce their recourse of lending in order to increase
the soundness, thus sacrificing business growth.
■ This leads to a limitation of the potential growth of SMEs and as a result to a limitation of the competitiveness
of the overall economy.

The trend leads to a sub-optimal growth model for SMEs due to the funding constrains and to a reduction in risk
exposures. However, banks, public authorities and SME owners have nowadays a collective interest to find
alternative solutions to make the growth model progress towards more competitiveness.