What are public banks and what tasks do they have?
Banks or national promotional institutions, as defined by the European Commission, are legal entities that carry out financial activities, which have been mandated by a Member State (or by one of its entities), at central, regional or local level, to carry out development activities in their respective territories. The European Association of Public Banks (EAPB) brings together financial institutions, development agencies, public banks and their representatives from 15 Member States and European countries, representing their interests towards European institutions and stakeholders. With a total balance sheet total of around 3,500 billion euros and a market share of around 15 percent, the members of the Eapb make up an important slice of the financial sector in Europe. Their activity consists of providing funding and services for projects that, although promising, could not have been financed, they attract additional financial resources from institutional investors and commercial banks, playing a central role for economic development in the EU. In addition, sustainable economic and social development is an integral part of their DNA.
What role do public banks play in supporting businesses and families during the coronavirus emergency and the restart phase?
During the months of the health and economic emergency, the public banks worked together with private sector financial operators to provide timely credit to the real economy and financial support to businesses in difficulty, mainly by financing liquidity at interest rates lower than those charged by the market. They have also introduced initiatives for a moratorium on loans and deferment of payments, the possibility of raising the limits of current accounts to keep customers' positions solvent, assisting companies on liquidity management, financial planning and subsidies. The Recovery Fund, about which much is being talked about these days, and the Multi-year Financial Framework, which provide for an allocation of 750 billion euros from January 2021, will be key instruments to support the restart phase. Our members will be able to directly implement the European funds, collaborate with the European Investment Bank (EIB), the European Investment Fund (EIF) and the Sie funds (European Structural and Investment Funds) at national level, in addition to the national and regional funds they already manage.
How do public banks contribute to the implementation of the European Green Deal strategy?
Sustainable development is at the heart of the new European programming period 2020-20207. Already now, about 80% of Eapb members finance 'green' projects of retail customers, SMEs, local authorities and regions, with a focus on renewable energy, energy efficiency, water and waste treatment. In 2019, according to the data available to EAPB, 'green bonds' have been issued by European public banks for about 19 billion euros. The Recovery Fund and the Multi-year Financial Framework will be a unique and unrepeatable opportunity for banks to promote the objectives of the Paris agreement on climate change. In addition, to meet the challenges posed to the health system and the community by Covid-19, the development of 'social bonds' for financial support to initiatives of social interest is being studied by some associates.
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