EBRD Annual Meeting 2014 Associated Event: How to Ensure Sustainable Finance

By Anna  Engstrom

A joint EBRD-Institute of International Finance-National Bank of Poland conference held after the Annual Meeting and Business Forum provided an opportunity to tackle some of the key questions facing policy-makers and regulators in the financial sector in the coming years.

These include how to tackle barriers to credit supply while supporting SMEs and innovation; the implementation of the Banking Union and how to ensure economies outside the Eurozone benefit; establishing diversified funding sources; and designing infrastructure financing projects to overcome the limitations of small and segmented domestic capital markets.

The event began with a panel discussion on transforming bank business models in support of SMEs and innovation, focusing on the role of banks in supporting SMEs and how to best ensure the long-term support and growth of SMEs in the EBRD region.

During the second session, Creating a Financial Architecture Supporting Cross-Border Banking, introduced by EU Commissioner Michel Barnier, the panellists discussed whether we have too much or too little cross-border banking in Central Europe, a question that cannot be answered without discussing the appropriate growth models for the economies in the region and an understanding of what kind of regulatory and supervisory framework could be established.

During lunch, Marek Belka, EBRD Governor and President of the National Bank of Poland, spoke on the ‘new normal for the financial market in the CESEE after the crisis‘, calling on the financial sector and the authorities to play an even more innovative role in ensuring the maintenance of sustainable economies.

During the afternoon sessions, the speakers debated how to grow sustainable capital markets in transition economies, focusing on the role of stock exchanges in contributing to future economic growth, and ways to promote the development of more complex financial instruments, such as covered bonds and asset-backed securities.

The panel on structured products concluded that although controversial due to their contribution to the financial crisis, structured products have recently regained popularity. Speakers on the second panel addressed the future of stock exchanges and market infrastructure, specifically whether integration will be vertical or horizontal.