Credit Guarantee Schemes in European Economies: The Potential Impact of Different Financial Systems
Abstract: The access to credit for micro, small and medium enterprises is argued to be suffering from market disequilibrium with information asymmetries, adverse selection and capital rationing being present. Different instruments can and have been used by policy makers to try to battle these problems. This thesis focuses on one of them, the credit guarantee scheme (CGS). In order to establish what factors affect how and in what way credit guarantees are used, a comparative analysis is conducted on CGSs in Italy, Germany and the United Kingdom. This research relates the findings to the different financial systems of the three countries. In line with previous research, this paper finds Germany’s capital regimes to follow a bank-based system, Italy’s showing signs of a more state-oriented approach, and the United Kingdom operating a market-based financial system. It is concluded that institutional factors that have developed along with these different systems suggestively could have had an impact on the structural aspect of the CGSs currently being in use.
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