New banking regulations may hinder small business lending, causing economic fragmentation.
The financial crisis showed that banks were taking too many risks and relying too much on short-term funding. To fix this, regulators made new rules for banks to follow. These rules are meant to make sure banks are safe and can help the economy grow. Banks are changing how they do business to follow these rules. But in Europe, these rules might make it harder for small businesses to get loans from banks.