The Impact of the Financial Crisis on Bank Relationships and Financing Conditions

The EACT (European Association of Corporate Treasurers) releases the results of its annual survey of funding conditions for European companies. This confirms that whilst there are clear signs of improvement, companies still struggle to support their contribution to economic recovery with good access to bank finance. We hope you will be interested to see the short summary, which is supported by the detailed results. Between November 2012 and February 2013 the EACT conducted its fourth survey to provide a pan-European view of the impact of the financial crisis on the bank relationships of companies and on financing conditions for corporates. The survey received 516 answers from 18 countries. The distribution of the responses - which came from all major countries in the Europe - is shown below [1]. The key messages coming from the survey are:

  • Whilst financing conditions remain difficult there are signs of improvement - or at least of less sustained deterioration
  • One company out of five is still experiencing a reduction in credit availability. However this compares with the situation in mid-2009 when roughly 50% of companies reported reductions
  • Whereas in mid-2009 29% of companies reported that banks were cancelling credit lines this has now reduced to 11%
  • Banks are still putting pressure on pricing, but less so than at the beginning of the crisis: 43% of companies report upward pressure on pricing of uncommitted short term funding compared with 80% mid-2009
  • The response of banks to requests for increased lines of credit has remained broadly constant over the four surveys, with roughly two-thirds offering such support to companies
  • The majority of companies reported that additional efforts are being made to centralise cash within their groups
  • The survey identified disappointing efforts by banks to communicate with their customers on the impact of new regulations, with only 22% of companies reporting banks' briefing them on EMIR (derivatives regulation)

Commenting on the survey results, EACT Chairman Richard Raeburn said: "Our survey underlines that funding conditions remain challenging for companies across Europe. Whilst there is evidence of improvement it is disappointing to see confirmation that whilst businesses seek to grow economic activity and build employment financing that growth remains difficult". Full survey results can be found here. [1] Responses by country: Austria: 5; Belgium : 1; Czech Republic : 16; Finland: 20; France : 86; Germany : 23; Hungary: 16; Ireland : 32; Italy : 46; Luxembourg: 1; Netherlands : 54; Poland : 34; Slovakia: 13; Slovenia: 34; Spain : 45; Sweden : 12; Switzerland: 33; United Kingdom : 45

View Document

News


EACT Newsletter - February 2020

Photo from EACT Newsletter - February 2020

The latest issue examines the latest EU policy initiatives, assesses the impacts caused by interest rates below zero and reports on how European treasurers have joined forces on instant payments

View More

EACT Briefing Focus: Trade Finance Innovation

Photo from EACT Briefing Focus: Trade Finance Innovation

Trade Finance Innovation is a key topic for corporate treasurers. Recent decades have seen radical changes in the way we deal, shop, hedge, lend and pay, for example. Why shouldn't Trade Finance also deliver its full potential of transformation?

View More

EACT responds to European Commission consultation on implementing the final Basel III reforms in the EU

Photo from EACT responds to European Commission consultation on implementing the final Basel III reforms in the EU

The EACT is grateful for the opportunity to respond to this consultation on the implementation of the final Basel agreement in the EU. Read our position here.

View More

EACT responds to ESMA consultation on review of the Market Abuse Regulation and potential extension of its scope to FX spot markets

Photo from EACT responds to ESMA consultation on review of the Market Abuse Regulation and potential extension of its scope to FX spot markets

View the EACT's responses to the questions asked in the Consultation Paper on the MAR review report, published on the ESMA website.

View More

EACT Newsletter - December 2019

Photo from EACT Newsletter - December 2019

The latest issue features updates on what the new EU policy cycle for 2019-2024 will likely hold in store for financial services and corporate treasury, as well as event updates from various national associations.

View More