Bankers warn on infrastructure lending drought
Posted: 03 Jul 2012, 10:55
Bankers warn on infrastructure lending drought
Reuters – 3rd July 2012
PARIS (Reuters) - The financing of Europe's roads, railways and energy networks is at risk as looming tougher capital and liquidity rules deter banks from lending and insurers from taking their place, top bankers said on Tuesday.
Stiffer post-crisis bank rules designed to crack down on risk, known as "Basel III", make it more costly to lend over the long term and infrastructure projects are in the firing line, Societe Generale chief executive Frederic Oudea told a finance conference in Paris.
"Banks will have to keep less loans on their balance sheet," he said. "It is very significant in particular with relation to project finance, infrastructure finance."
Prospects that big insurance companies like French group AXA or pension funds might fill the gap have been dampened in part by the insurance sector's own regulatory bugbear, "Solvency II", which is also viewed as making long-term equity investments more expensive.
"Infrastructure financing is incredibly important for the future," said Samir Assaf, chief executive of HSBC global banking and markets. "Solvency II is not allowing insurance companies...to come and substitute banks in this area."
One institution in France that is looking to take up more of the financing strain is state bank Caisse des Depots, which is being promoted by the new Socialist government even as private banks publicly rail against it.
"Public tools can help to increase private investment," said the CDC's Acting CEO Antoine Gosset-Grainville.
(Reporting By Lionel Laurent; Editing by David Cowell)
http://uk.news.yahoo.com/bankers-warn-i ... ector.html?
Reuters – 3rd July 2012
PARIS (Reuters) - The financing of Europe's roads, railways and energy networks is at risk as looming tougher capital and liquidity rules deter banks from lending and insurers from taking their place, top bankers said on Tuesday.
Stiffer post-crisis bank rules designed to crack down on risk, known as "Basel III", make it more costly to lend over the long term and infrastructure projects are in the firing line, Societe Generale chief executive Frederic Oudea told a finance conference in Paris.
"Banks will have to keep less loans on their balance sheet," he said. "It is very significant in particular with relation to project finance, infrastructure finance."
Prospects that big insurance companies like French group AXA or pension funds might fill the gap have been dampened in part by the insurance sector's own regulatory bugbear, "Solvency II", which is also viewed as making long-term equity investments more expensive.
"Infrastructure financing is incredibly important for the future," said Samir Assaf, chief executive of HSBC global banking and markets. "Solvency II is not allowing insurance companies...to come and substitute banks in this area."
One institution in France that is looking to take up more of the financing strain is state bank Caisse des Depots, which is being promoted by the new Socialist government even as private banks publicly rail against it.
"Public tools can help to increase private investment," said the CDC's Acting CEO Antoine Gosset-Grainville.
(Reporting By Lionel Laurent; Editing by David Cowell)
http://uk.news.yahoo.com/bankers-warn-i ... ector.html?