October 2006
Debt: What next for the public sector institutions?
Europe’s supranational and agency borrowers are becoming ever bigger issuers in the international capital markets even as their historical missions appear to have been met and the banking and financial market to have matured enough to finance at commercial rates most of the lending risks the agencies assume. The debate as to whether these subsidized institutions distort or complement the capital markets continues unabated, as private lenders submit to capital adequacy directives that do not extend to the agencies. Alex Chambers reports.
| Most supranationals and agencies have been in place for about 50 years and are a key part of the world’s financial infrastructure. They are still getting bigger and their lending has a profound impact on the commercial sector. But they are not governed by the same rules as commercial banks and their proper role is a matter of debate. |
MUCH OF THE argument over the new banking regulatory regimes initiated in the past few years has centred on ensuring a level playing field. Nevertheless, no one thought to include the supranationals and agencies in these discussions. In 2007 the larger European banks will be regulated under Basle II. But KfW, Instituto de Crédito Oficial, Caisse des Dépôts et Consignations, Cassa Depositi e Prestiti, OKB and supranationals such as the European Investment Bank are all institutions to which the EU’s Banking Consolidation Directive applies only for limited supervisory purposes. They are not required to comply with the Capital Adequacy Directive 3, which imposes minimum capital requirements.
You must be a Level 2 subscriber to access this archived content.
If your subscription includes access to the archive, please log in now to view.
To gain access to this content visit the subscription page or call our hotline on +44 (0)207 779 8999.
Subscribe online now and save up to 30% on your subscription.
If you are a trialist or subscriber, please enter your username and password at the top right-hand side of euromoney.com
Subscribers to Euromoney benefit from:
Level 1:
- Online access to the past 12 months content
- Tailored RSS news feeds direct to your desktop
- News delivered directly to your mobile device or PC
- Personalised email newsfeed of 'Top stories' and 'Breaking news'
Level 2:
- Exclusive access to euromoney.com - Read the latest issue early online, search for specific developments by region or sector, interrogate the results of Euromoney's benchmark polls, and view the archive dating back to 2000
- 12 monthly issues of Euromoney magazine
- More than 30 specialist research guides free
- The results of Euromoney’s polls and surveys
- Tailored RSS news feeds direct to your desktop
- News delivered directly to your mobile device or PC
- Personalised email newsfeed of 'Top stories' and 'Breaking news'
Click here to subscribe