Effect of Basel III on the Financing of SMEs in Austria

This analysis of how Basel III impacts on the financing of SMEs in Austria focuses on the effects of its more stringent equity requirements on the banks' intermediary role. In a first step, the development of the credit volume in specific banks is correlated to their equity. The second steps involves linking the bank data to company data in order to analyse the effect of the more stringent equity requirements on lending to SMEs. Based on the empirical findings, options for economic policies targeted at SMEs are described and assessed.