Emergency loans to SMEs – ETH proposes the extension of the emergency loans before SMEs are to be allowed to invest the money for the future, propose ETH-business researchers. For the banks to assume part of the risk – what could cause problems. Rita Flubacher0 KommentareDie Restaurants are back in operation: A worker cleans the tray to the Buffet. Photo: Alexandra Wey (Keystone)
For his quick and uncomplicated loan program against the economic downturn, the government received even from abroad admiring comments. The purpose was to prevent a wave of bankruptcies. The loans may be used by the SMEs is, therefore, to cover the ongoing operating costs.
This is a deficiency, apply now three the economy researchers at the ETH Zurich. Covid-19-loans should also be available for investments in the equipment and in research and development, they suggest.
The ETH-Zurich researcher Hans Gersbach, Heiner Mikosch and Jan-Egbert Sturm see a need for action here. Reason: In Switzerland, investment signs of weakness, they warn in their Tuesday proposal published. The KOF expects for this year, with a decrease in the total equipment investment of around 13 percent, while private consumption is expected to only shrink by about 2.5 percent. A “healthy investment dynamics,” but for the recovery of the overall economy, the KOF-experts.
loan year
Thus, the ETH-Zurich researchers propose modifications to the lending program:
The program will be extended by one year, until 31. July 2021. The total sum of 40 billion Swiss francs remains as the upper limit. Companies in the extension phase, starting from 31. July 2020, request a loan, can use for investments.
For already existing loans are to the rules of the game, in principle, be changed, says Jan-Egbert Sturm, on request, the money may only be used to cover ongoing operating costs. With one exception: The KOF-experts suggest that that have already been approved, but not yet fully claimed loans can also be used for investments.
to be used As a survey among banks shows, SMEs in the spoken credits at the value of 15.3 billion francs, up to now, less than half. First company to pay back the loans at all.
banks need to take on credit risk
And what is the ETH Zurich-a proposal for the banks means? All newly approved loans are secured only partially by the Federal government, the proposal. The rest of the credit risk borne by the Bank. The consequence of this is that banks in the new allocation will take a closer look – after all, it costs any default of money for which the Bank has to make in the balance sheet as a Provision.
The KOF Swiss economic Institute, experts expect that in the course of this granting of new loans of the state an ever-smaller share of the default risk must carry. You expect the state has until the end of the year, yet 70 percent of the risk, to 30 percent, according to the banks would have in the books. By the end of next year, the risk in the banks ‘ share is expected to rise to 50 percent.
The requested major banks, UBS and Credit Suisse wanted to examine the proposal in more Detail before you take a position.
The desired structural change will not be hindered, but rather encouraged.
The KOF Swiss economic Institute experts consider the Transfer of default risk to the banks is necessary: Because that’s the way it was ensured that only investment projects for sustainable business models to be financed. Companies that do not comply with these requirements would fall out of the program. “The required structural change is not hindered with this program, but rather encouraged,” it says in the paper.
And it should come in spite of everything, to an ongoing investment crisis, the authors propose additional measures should, however, be limited in time. You think of tax relief, and accelerated depreciation opportunities for investments and financial support of research and development expenditure. For the state, these measures would be due to a direct loss of revenue to are, however, significantly more expensive than the now proposed adjustments to the lending program, maintain the authors.
declared The state Secretariat for economic Affairs Seco, that you could not speak to the proposals. The Federal Council will set out its approach in the context of the Consultation draft of the Covid-19-joint and several guarantees act, said a spokesman.
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