Investment is essential if Europe is to achieve its 2020 objectives and should be encouraged by adapting accounting standards and the financial regulatory environment to the specificities of long term investors, Europe’s four leading public financial institutions argue in proposals made today.

The proposals were presented to European Internal Market and Services Commissioner Michel Barnier at a round-table on long term investment in Brussels organised by the four institutions: European Investment Bank (EIB), Caisse des Dépôts (CDC), Cassa Depositi e Prestiti (CDP) and KfW Bankengruppe (KfW).

The four institutions urged the European Commission to look more closely at Europe’s long term investment needs and bring forward remedies to the barriers for long term investment that they have identified.

The proposals are based on the conclusions of a working group of experts that identified obstacles to the development of long-term investments in the current European financial regulatory framework. The experts designed proposals that could alleviate these drawbacks, in particular in the context of the reform package of the Basel Committee on capital and liquidity requirements (Basel III) and the new IFRS standard for reporting on financial instruments.

The Round-Table was organised in the presence of representatives of the European institutions (Commission, Parliament and Belgian Presidency of the Council) and of European SMEs and regulatory bodies. Speakers included EIB President Philippe Maystadt, CDC CEO Augustin de Romanet, CDP Chairman Franco Bassanini, CDP CEO Giovanni Gorno Tempini, KfW Senior Vice-President Lutz-Christian Funke and Jean-Paul Gauzès, Member of the European Parliament.

All participants agreed long term investment - notably in knowledge-based industries, SMEs, low carbon emission projects and infrastructure projects - is crucial to meet the objectives of Europe’s 2020 strategy.

About the institutions:

European Investment Bank (EIB)
The European Investment Bank was created by the Treaty of Rome in 1958 as the long-term lending bank of the European Union. The task of the Bank is to contribute towards the integration, balanced development and economic and social cohesion of the EU Member States. Besides supporting projects in the Member States, its lending activities also include financing investments in future Member States of the EU and EU partner countries. The EIB raises substantial volumes of funds on the capital markets (with a consistent AAA rating) which it lends on favourable terms to projects furthering EU policy objectives. The EIB is wholly owned by the EU’s 27 member states and it continuously adapts its activity to developments in EU policies. In 2009, the EIB granted loans totalling over EUR 79 billion (8.6 billion of which outside the Union) and tapped EUR 79.4 billion from the capital markets under 262 borrowing operations.
www.eib.org

Caisse des Dépôts Group – France
The Caisse des Dépôts was founded in 1816, and is a State-held group with 71,000 employees (including its financial and service subsidiaries). As a long-term investor it serves the general interest, in support of public policies pursued by the French central government and local authorities. The Caisse des Dépôts’ Elan 2020 strategic plan has set four priorities aimed at addressing the most pressing issues facing France, namely: housing and urban development, universities, SMEs and sustainable development. CDC in 2009: net income: €1,98 bn, total assets: €255.6 bn, savings funds managed by the Caisse des Dépôts: €224 bn, shareholders’ equity: €19.2 bn.
www.caissedesdepots.fr

Cassa Depositi e Prestiti (CDP) - Italy
Founded in 1850, Cassa Depositi e Prestiti (CDP) is a joint-stock company under public control. The Ministry of the Economy and Finance owns 70% of the company, while the remaining 30% is held by a broad group of bank foundations. For 160 years CDP has been pursuing a public interest mission: financing the development of the country. Using postal funding, CDP finances the State, the Regions and other local Authorities and public entities. Using funding raised from institutional investors, CDP finances: projects, plants, networks and other infrastructure to be used to deliver public services, on market terms and conditions. CDP in 2009: Net income: €1.7 bn, total Assets: €227 bn, Postal funding €190.7 bn, Equity investments and Shares: €18,3 bn.
www.cassaddpp.it

KfW Bankengruppe (KfW) - Germany
KfW is a German banking group with the mission to promote economic, social and ecological development worldwide. As an entirely state-owned bank held by the Federal Republic and the Länder (German federal states), the bank offers support to encourage sustainable improvement in economic, social, ecological living and business conditions, among others in the areas of SME’s, entrepreneurial enterprise, environmental protection, housing, infrastructure, education finance, project and export finance, and development cooperation.
www.kfw.de

Conclusions of the European long-term financial institutions' working group on banking supervision