The European Union's financial services commissioner on Saturday urged the need to wean firms off being too reliant on traditional bank money, saying crowdfunding and venture capital are two "interesting" sources of funding.
Jonathan Hill, EU commissioner for financial services and capital markets, told CNBC that small-and-medium-sized businesses in the 28-nation bloc are too dependent on traditional bank financing which can hurt the economy if things turn sour in the banking sector.
"If you've got a system that's very dependent on one source of funding, and you have a contraction in bank funding like we had, then that has a very real knock onto the economy," Hill said on the side lines of the Ambrosetti Forum in Italy.
"If we can diversify and spread it, we can help also achieve a greater degree of financial stability," he added.
After the financial crisis hit, banks severely pulled backlending to businesses, making it harder for firms to borrow money through traditional avenues.