European bank lfinishing to tiny defence companies could be further constrained under Basel 3.1 capital reforms, potentially cutting mid-tier banks’ lfinishing capacity by a quarter, warned a report launched on the sidelines of the Munich Security Conference.
Unveiled at the conference on Saturday by Andrius Kubilius, European commissioner for defence and space, the report blamed increased capital ratios under Basel 3 for reducing banks’ desire to lfinish to defence SMEs, and warned that Basel 3.1 rules will impose “further restrictions”, including a 20 per cent to 25 per cent reduction in the lfinishing capacity of mid-tier banks.
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