EBRD President Odile Renaud-Basso
Good morning to all.
I’m very happy to be with you this morning.
And I want to start by wishing you all a very happy New Year.
We are just getting out of a very, very exceptional year with a tremendous shock for the world, but also some signs of resilience,
2020 was the year of the coronavirus pandemic and the worst crisis the EBRD countries of operations have faced since the Bank was created at the end of the Cold War.
But looking back at 2020 and the banking sector and, of course, our central and southern Eastern European economies, I want to start by highlighting and praising their resilience.
The region's banks are better capitalised, more liquid and less reliant on volatile wholesale funding.
Non-performing exposures remain broadly under control.
So banks’ loss absorption capacity has also be significantly strengthened, thanks to the phasing in of the new recovery and resolution regime in the EU.
And the ECB has also been key in this respect.
An obvious benchmark to measure such resilience against is to compare it with the 2008 financial crisis.
Back then the threat of massive deleveraging bringing the regional banking sector to its knees was very real.
What helped see off that threat?
The EBRD was one of the key institutions behind the setting up of the Vienna initiative.
This initiative continues to play a role in facilitating the dialogue between cross-border financial institutions, regulators and international financial institutions,
Which is important to mitigate the impact of the crisis on emerging European economies.
This is true even if we are today in a very different situation from the panic behind the scenes that we encountered in 2008.
Despite the very exceptional nature and magnitude of the economic shock we have been and we are still facing.
And, I may say so, I think it's important to underline that the response of international financial institutions to this crisis has also been very robust and very strong.
And this fully applies, in my view, to the EBRD.
Our operational results will show once again the countercyclical nature of our activity.
The preliminary figures we have for central and south eastern Europe show that the bank invested just over four billion euros in the region.
With its Solidarity Package, it streamlined its processes to provide finances to meet the short-term liquidity and working capital needs of existing clients.
We also developed new approaches.
One example of innovation is our new guarantee for growth mechanism launched just before Christmas.
Under that that we are providing Raiffeisen Bank Albania, for example, with a 100 million euros unfunded guarantee that will free up risk-taking capacity and will allow the bank to lend to the real economy.
This pandemic demonstrated also the vital role that trade plays in keeping the global economy going.
And that's why we have stepped up our capacity for trade finance up to three billion euros for 2020 alone.
We are also very committed to the development of capital markets and make a sizeable contribution to the delivery of the EU capital market union plan, both as an investor but also in our policy priorities, with a view to develop the investor base, to develop the capital market infrastructure and so forth.
Turning to 2021, the New Year will continue to test our agility to address our countries of operations’ needs.
It will also address the banking sectors and the economy's capacity to operate.
We earnestly hope that economies will begin to rebound and recover in 2021 and will reach the pre-crisis levels of output by the beginning of 2022.
Our working assumption is that growth should be around three between three and four percent in 2021 in the region, supported by the EU exceptional recovery and resilience plan and new resources that will start to be deployed in the region to build back better.
But the crisis will have a legacy, Transport, tourism, hospitality, some supply chains will have taken the long term hit.
The lockdown has forced us to rethink our values and way of working and recovery plans.
And given us a rare opportunity to build back better as consumers.
Businesses and whole economies will tilt to green.
The EBRD has a responsibility to support, to encourage and to accelerate a sustainable transition.
Our next five year institutional priorities are fully consistent with many of the EU recovery priorities such as the Green Deal, Digital and Just Transition.
Digital, energy transition and financial institutions are some of the many sectors impacted by new climate related and environmental risk guidelines prepared at the EU level.
They are also one of the main channels for deploying financial resources in support of green investments and building scale in this area.
That's why we are actively supporting partner banks with green financial products as well as encouraging them to prepare certified green bond frameworks.
And that's why we’ve invested in all bank green bonds issuance from the region.
Yes, indeed, green capital markets issuance are limited in size and number compared with those in more established Western European markets.
But we are looking forward to stronger activity in this area in the future and this would be one of our key priorities.
Ladies and gentlemen, we need to build back better.
We look forward to continuing to work with you all.
Thank you very much for your attention.