Companies' access to finance: a European action plan

Unless additional actions are taken to improve access to finance for companies, a further escalation in the crisis could be expected in coming months as rising default risk and financial sector losses lead to a new round of financing restrictions. The report, published on 27 March 2009, proposes recommendations which are far-reaching but practical and conducive to a rapid return of self-sustaining activities by commercial banks and capital markets:

• Central banks, including the European Central Bank, to engage in the outright purchase of short-term debt instruments issued by corporations;
• Governments and the European Investment Bank to increase the scope of risk-sharing guarantees offered to ease financing restrictions;
• Governments to reduce payment delays, cut administrative burdens and implement targeted fiscal measures;
• Governments, the European Commission, central banks and regulators to take initiatives to revive securitisation and credit derivative markets;
• European Commission and governments to strengthen a common approach to support commercial banks in distress, maintaining a level playing-field and allowing the necessary restructuring of the banking sector to operate under market conditions.