Titan Business Insurance is concerned that bank lending to SMEs has continued to dry up as institutions protect their balance sheets in worsening economic conditions.
And Titan believes that there are some signs of recovery in the US, the
poor sentiment brought on by the slow death of the eurozone is making UK and mainland banks reduce their exposure to companies and individuals.
The fear of contagion, says Titan, means that the country is stuck in a vicious circle of trying to put out the fires with tough austerity measures, yet keep some heat in order to fuel growth. And that, believes Titan, is nearly mission impossible.
Chief Executive Officer of Titan Business Insurance, Basil Tsapralis, said:
“The effect of not sorting out the eurozone crisis is now becoming clear. Politicians appear to believe that by stalling, fudging and pretending that the problem is not there, they make all the issues go away. Yet they cannot even sort out Greece, which overhangs the market like a ghost. The markets have already priced in a partial, if not complete Greek default, but once that happens, they are sensitive to Italy and Portugal following, a nightmare situation that will cause banks to be stressed as never before.
“And, it’s of little comfort to SMEs, starved of working cash flow and capital, that Europe’s leaders are playing a risky game of Russian roulette with all our futures at stake. Good, or bad, we now need a resolution and we need to move on to the new playing field, because then we know what we have to contend with. Indecision is leading to paralysis in the system.”
Titan Business Insurance is a specialist in the SME market.