Study on the Guarantee Notice

This study, commissioned by the European Commission’s Directorate-General for Competition (DG COMP), evaluates the 2008 Guarantee Notice, in line with the
Commission’s Better Regulation principles. The analysis focused on three areas:
(i) characteristics of guarantee measures and identification of applied pricing methods based on data collection on past measures;
(ii) development of benchmark pricing methodologies based on the literature review on pricing of guarantees;
 (iii) quantitative and qualitative assessment of the effectiveness, efficiency and coherence of the Guarantee Notice.
Key findings from the study highlight a substantial variation in guarantee pricing across Member States, reflecting differing risk assessments and market conditions. 
Evidence suggests that current pricing methods generate lower guarantee prices compared to market benchmarks suggesting that there is significant room for enhancement to better reflect the risk profiles of beneficiaries and to streamline administrative processes.

The study also explores the impact of guarantees on access to finance, market competition and efficiency, revealing that guarantees generally improve access to finance without significantly distorting market competition. Overall, the study provides insights on the regulatory framework governing financial guarantees, emphasizing the need for clearer guidelines to enhance consistency and effectiveness across the EU.