The European Bank for Reconstruction and Development promotes the support for western European banks in central and eastern Europe although evidence for this initiative's success is disputable at best.
As pressures mount on western European banks to shore up capital ratios and with 2012 economic growth forecasts for Europe falling close to zero, officials from the European Central Bank, the European Commission, and several international financial institutions (IFIs) are meeting today in Vienna with regulators from CEE countries to discuss a second round of financial support for a fragile CEE banking sector.
As the eurozone crisis continues to unfold, lending from international financial institutions to the banking sector must be held to the task of supporting the most vulnerable - especially the SMEs in CEE - or it will continue to perform largely unsuccessful and unchecked as it has during the crisis to date.
By requesting a number of changes at the European Bank for Reconstruction and Development, the European Parliament has confirmed at least some of Bankwatch's criticism of the bank's mode of operation and (in a subtle way) also its overall approach.
Ahead of a meeting next week that offers a unique chance for discussion with the EIB's Board of Directors, Bankwatch's EIB team leader Anna Roggenbuck gives an overview over some of the issues to which she'd like to hear some comments by the bank's enigmatic leadership.
The Bankwatch EIB team read the most recent report by the European Investment Bank on the bank's crisis lending to small and medium enterprises and they were surprised by its main claims: unlike what the EIB says, our own research shows that EIB crisis loans to SMEs were more helpful to commercial banks disbursing them than to the cash-strapped small and medium enterprises they were supposed to help.
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