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Local currency and capital market development

The EBRD’s Local Currency and Capital Markets Development Initiative

The EBRD’s Local Currency and Capital Markets Development (LC2) Initiative, launched in 2010, aims to strengthen local capital markets and to encourage the use of local currencies in the countries where the EBRD invests.

Local capital markets development has always been high on the transition agenda for  developing countries. They provide a reliable source of funding, thereby contributing to financial resilience and sustainable growth.

Together with local authorities, capital market regulators and market participants, we have been working hard to reduce reliance on foreign currency lending and borrowing through policy dialogue and technical cooperation. Besides our work on reforming the legal and regulatory framework for capital markets in Armenia and Ukraine, we have helped SMEs to be involved in local capital markets and support governments with their capital market development strategies. In addition, some of our work aims to enhance the capital market infrastructure.

On the banking side, the EBRD invests in debt capital-market instruments as well as equity. These transactions promote higher standards of corporate governance while also fostering capital market development and promoting alternative sources of financing.

The EBRD first lent and issued bonds in a local currency (in Hungarian forints) in 1994. Since then EBRD’s bank wide operations have been increasingly in local currency. In 2019, the EBRD signed the equivalent of almost €2 billion in 137 local currency loan and bond transactions, 37 per cent of the total number of debt transactions by the EBRD in that period. During the same year, the Bank issued local currency bonds denominated or linked to 9 currencies of countries where the EBRD invests for funding purposes.

How we help the countries where we work

The Local Currency and Capital Markets Development (LC2) Initiative is made up of five different teams:

  • The LC2 Team provides critical linkages between policy dialogue and investments by offering technical cooperation projects that promote sustainable local currency markets, a more efficient capital markets infrastructure, a stronger domestic institutional investor base and an overall more liquid domestic market.
  • Banking provides local currency loans and invests in capital market transactions.
  • Treasury develops and advises on local currency loan features, funds and manages exposures arising from local currency assets.
  • The Office of the General Counsel supports local authorities with legal and regulatory reforms related to capital markets development.
  • Economists, Policy and Governance Analysts evaluate progress made on local currency intermediation and capital markets development.
Capital Markets                                                                We play a significant role in international capital markets.                                                Read more
LC2 Initiative                                                                     An introduction to our Local Currency and Capital Markets Development Initiative.                                                                Read more
Contact the LC2 Team
Alex Pivovarsky, Director
Tel: +44 20 7338 7830
Tricia Park, Principal
Tel: +44 20 7338 8124