Disintermediation of corporate financing in the euro zone: Is this a good idea?

Since the 2008-2009 crisis, there has been a gradual disintermediation of corporate financing in the euro zone: the proportion of bank credit has declined and the proportion of bonds has increased in the financing of these companies. This development is logical: the cost of bank intermediation has increased due to the new banking regulations, and bank financing has become less competitive than bond financing. We seek to determine whether or not this change in corporate financing is positive. On the one hand, it reduces the risk of a banking crisis, since a larger part of corporate risk will be borne directly by savers and no longer by banks, which currently have to be able to absorb this risk; it makes monetary policy more effective, thanks to a stronger transmission of the effects of this policy on financial market prices than on bank lending conditions. On the other hand, however, it makes it more difficult for small and medium-sized enterprises to raise financing. Financial markets can freeze up for quite long periods of time, which requires a high degree of flexibility among companies, which have to be able to rapidly adjust their borrowing requirements.