public financial institutions in europe 1 mathias schmit brussels, 11 th october 2011

Public Financial Institutions in EuropePublic Financial Institutions in Europe

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Mathias SchmitBrussels, 11th October 2011

Public Financial Sector in the EU27+5 Public Financial Sector in the EU27+5

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•Who?

•What?

•Why?

•How?

Who?

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Mar

ket s

hare

of i

nstit

ution

s w

ith p

ublic

par

ticip

ation

(%)

Market share of public companies (%)

Levels of public involvement in the European financial industryLevels of public involvement in the European financial industry

What?What?

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Why?Why?

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• Mitigate negative externalities

• Maximise positive externalities

• Compensate the private sector’s short-sightedness

• Preventing capital drain from poorer to richer regions

• Jump-starting financial development to avoid desintermediation

How?How?

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• Description of main business models in the EU27+5

• National and Regional Development agencies• Municipal Credit Institutions• Export Credit Agencies• Public Savings banks• Long-term investors• Public Financial Intermediaries

EAPB study fills a wide gap in the literature EAPB study fills a wide gap in the literature • PFI are not defined (essentially based on ownerships)

• Studies mainly on performance– Results quite mitigated (diverging opinions)

– Without any ex-ante links to their missions / roles / business models

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=> This study includes a complete sector analysis

Key MessagesKey Messages

• Key roles of the public financial institutions – in a volatile environment– Multiple functions– Mutiple business models

• Multi-dimensional performance metrics for public financial institutions– Multiple bottom lines

• Outreach• Adequate financial metrics• Risk vs. retuns• Efficiency vs. effectiveness

– Be aware of dogmatic thoughts and one fits all approach– In view of Basel III

• Examples - Illustrations

Thank you for your attentionThank you for your attention

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Contact detailsMathias Schmit

Managing Director SAGORAProf. Solvay Brussels School of Economics and Management

Email: m.schmit@sagora.euMobile: 0032-496.93.22.70