|Alternative Funding Network|
Banks Reduce Assets to Avoid Taxpayer Funded Bailout
In efforts to avoid another taxpayer funded bail out, Europe’s biggest banks will have to cut €661bn of assets and generate €47bn of fresh capital over the next five years to comply with forthcoming regulations. The greatest effect will be on the smaller banks; with them reducing by €2.6tn the amount of loans made to SME’s will be greatly reduced. Ultimately, this reduction in available capital begs the question of how SME’s can hope to grow whilst banks reducing their lending.