Currently, there are no data-based reasons or market imperfections for the creation of the State Bank, said Lauris Mencis, chairman of the board of Swedbank, in an interview with LETA agency.
“However, we have been living in a system based on private initiative in free market conditions and private capital for more than 30 years. The state intervenes where free market instruments cannot fix something or where objective reasons are understandable, such as national security and strategic interests,” said Cod.
He expressed the opinion that currently there is only what is called “anecdotal evidence” when someone cannot open an account or get a loan at the intended address. There is no comprehensive qualitative research and discussion on whether there really are market failures in the financial sector.
Mencis explained that the “Development Financial Institution “Altum”” is already operating with more than 40 programs, most of which are directly intended for the purposes where market deficiencies have been identified in an objective process, which must be resolved. However, now the slogan about the state bank has been drawn, because banks are making money and, as it were, not lending.
“At the same time, no one has yet said what the mandate of such a state bank will be, so, to be honest, it is difficult to comment in detail at this stage, because we have not heard the proposals. Business logic says, if the state bank will finance where there is objectively no market , then in case of failure, the losses will be covered by the shareholders, or in such a case, by means of the state budget,” said Mencis.
He emphasized that a company with a sustainable business model, good management and an unquestionable reputation can get financing in the banking sector, choosing between competing offers. On the other hand, for large infrastructure projects or large companies, the presence of institutional lenders, such as the European Investment Bank or the Northern Investment Bank, is increasingly visible, which makes the options even wider.
“And then the question is, what is the client profile for which the state will offer solutions? If it is a client who, in the view of the commercial banking sector, does not have a sustainable business model, who does not have good management, who has reputational risks, is this the client base that which should a state-owned bank be looking at? I can only express the question, are all taxpayers willing to collectively foot the bill for such an initiative, and what suggests that it will be successful this time?” said Cod
The head of the bank added that he would like to work together on solving real problems in the Latvian economy based on data and qualitative analysis and would not waste energy on preventing people from stepping on the old rakes.
2024-03-08 16:06:38
#Expert #comprehensible #databased #reasons #creation #State #Bank
