As a result, the accommodative monetary policy stance set by the Governing Council has affected firms rather unevenly. The ECB will provide ample liquidity as long as needed, but market participants have to continue their efforts to facilitate the transition to a less central-bank reliant, more market-based financial system.
Against this background, attention has turned to the role of public policies in reducing impediments and unclogging credit channels towards SMEs. As a first measure, most governments have expanded credit guarantees to SMEs for the purpose of inducing banks to reopen their lending facilities, thereby reducing the risk that banks need to take on their balance sheets when granting new loans.