European companies facing credit crisis - report

European companies are likely to have more difficulty obtaining credit as international banks grab market share from their domestic counterparts, according to new research quoted in a report in the Financial Times.

As international banks are much more aggressive than domestic ones, they are therefore more likely to lend only to companies to which they can also sell more profitable products and advice.

A study by consultants Greenwich Associates finds that foreign banks now account for 64% of all lead international banking relationships, up from 53% two years ago.

European companies enjoy much easier access to capital than those in the US, whose lenders impose a much closer relationship between their willingness to lend and their need also to win more profitable business.

However, the research says that trends such as mergers of domestic banks, the exit of some domestic players from the corporate banking business, and the rise of international banks - indicate the possibility of a shift in the direction of a US model, where business credit is more difficult to obtain.