using harmonized payment products to the overall speed of the integration process. smes ’ financing conditions under stress let me start, first, with how smes have weathered the crisis and would therefore like to take a closer look at smes ’ financing conditions. the resilience of our economy in the period of the financial crisis is crucially dependent on the ability of smes to appropriately provide for their financial needs. unfortunately, very few quantitative statistics are available. therefore, i am happy that direct evidence regarding smes ’ access to finance is now available from a new, large - scale survey implemented jointly by the ecb and the european commission, the first wave of which was conducted in july this year. when asked what type of external financing they would prefer to use in order to fund growth opportunities, 70 % of smes replied that they would apply for a bank loan. hence, the financing conditions of smes are closely linked to the situation of the banking sector, i. e. the lending rates and the availability of credit. for us at the ecb, this aspect of the smes ’ financing structure is absolutely crucial for our assessment of the monetary policy stance and the transmission of our monetary policy decisions to the economy at large. during the crisis, securing financing has proven difficult for many smes and a source of serious concern for monetary policy. let me take this opportunity to stress that the decisions taken by the governing council of the ecb in terms of monetary policy and the support of the banking system via our refinancing operations have been instrumental in preventing the risk of credit drying up completely. nonetheless, it is clear that smes have experienced a severe deterioration in their economic environment over recent quarters and have seen their access to finance significantly constrained. smes have been widely affected by sluggish demand and a slump in export markets. at the same time, they have also been affected in their role as suppliers, sub - contractors and service providers to large firms which themselves were struggling with economic difficulties. according to the survey evidence, smes experienced a significant deterioration in their turnover and profits in the first half of 2009, and they were more adversely affected by the crisis than large companies. indeed, a higher net share of smes than of large firms indicated that their capital base had deteriorated. of course, the economic uncertainty and unfavourable outlook was anything but conducive to an increase in firms ’ demand for loans. at the same time, the deteriorating situation of

without a problem. banking software may need to be updated, but this can be accomplished in the course of the normal investment cycle of the firm in question. in my view, the transition costs are certainly outweighed by the benefits stemming from faster and cheaper payments, legal certainty and the ease of doing business throughout europe. i sometimes hear the question : is it really working? are banks really delivering? all the building blocks for an integrated retail payment market are in place. it is important that customers too demonstrate demand for sepa benefits and urge their banks to make sepa a reality. small and medium - sized companies should aim for the benefits of sepa. conclusion europe has come far in terms of integration. the single market for labour, goods, services and capital was fully established 16 years ago with the maastricht treaty. this single market now requires a single market for payments. the european retail payment systems will be integrated by means of common standards, common payment instruments and common business rules and conditions. the sepa project is an integral part of this process. i highlighted four main benefits for end - users, which include smes. • the legal certainty regarding payments will remove another important barrier to trade • faster payments will improve liquidity conditions for all companies • enhanced competition in payment services will contribute to lower costs and will be a key driver of innovation and • standardisation will provide easier access to banking software and payment terminals, including for smes. given these tremendous potential benefits arising from sepa and the overall harmonization process, we need to make a further leap forward in the sepa implementation. this entails existing sepa instruments, the credit transfers and direct debit, but also innovations in the field of esepa, such as e - payments which can greatly benefit the payments business of smes. the take up of the sepa products – until now – is rather modest. the ecb is convinced that a binding migration end date for sepa is needed. it is in the interest of all stakeholders to migrate quickly to the sepa instruments. and let me emphasize – once more – that also smes as key users of payment instruments can make an important contribution to the successful implementation of a harmonized and integrated retail payments market. the financial crisis has put severe strains on smes and i have mentioned the results of our survey on the access to finance of smes conducted jointly by the ecb and the european commission in this respect. therefore, on the one hand,