The Financial Institution Development (IFD), known as “development bank”, received a banking license from the Bank of Portugal in order to operate as a wholesale financial institution. The Government received approval on Wednesday (about three and a half months after the application has reached the central bank) had given on Thursday the green light by the Cabinet to start the institution.
The functioning of the bank was to be expected by the executive to the end of the first half, but the term ended up skidding, with the start scheduled for October.
After formally established the IFD, The Bank of Portugal has yet to authorize the commencement of operations of the institution. Economy Minister, António Pires de Lima, said at the end of the Council of Ministers to be expected that the bank “may be able to function” in October to “begin organizing its first operations in the last quarter of this year.”
The IFD will be headquartered in Porto and will operate as a wholesale banking institution to leverage a portion of the funding directed to the Small and Medium Enterprises (SMEs) European Structural Funds. Not have retail branches as commercial banks, through their intermediary that receives loan applications to extend credit.
The Government’s intention is that in seven years the Community framework for the following support ( Portugal 2020), the “development bank” to mobilize at least EUR 1500 million of funds for SMEs, about a third of this thematic purpose. The IFD will also be able to act as a vehicle to leverage incentives from the European Investment Bank (EIB) and other relevant bodies (such as development banks, German, French and Spanish).
The Economy Minister António Pires Lima, creased at the end of the Council of Ministers that the IFD will “fundamentally a function of the anti cyclical funding level,” acting on three central pillars – in bank lending, the capitalization of SMEs and management of reimbursable grants to companies.
“What we all felt in 2011, in 2012 and partially in 2013 is that, in times of recession or economic stagnation, financing the economy tends to follow this trend and generate a movement that ultimately amplify the economic recession or stagnation own, “said Pires de Lima, reinforcing the role of” development bank “in the economic recovery. According to him, it is “normal” that name over the role of DFIs “when the economy tend to fall into stagnation or recession,” he said. Financing SMEs, defended, it is important for the “consolidation of economic recovery” and investment.
The institution will start with a capital of EUR 100 million, which “may increase depending on the their needs, “said Pires de Lima. Capital will be “public bodies that bind to activating the economy and also with the management of EU funds”, as the SME Investment in Mutual Guarantee Association, Portugal Ventures and the Society for Development Finance (Sofid).
Supervision fit, as in the case of retail banks, the Bank of Portugal. . The institution is also subject to control by the Court of Auditors and the General Inspectorate of Finance
The board of directors will have seven to nine members: two to four will be managers with executive functions and the remaining non-executive directors . The governing bodies of the IFD will also have an audit committee composed of three members.
“development bank” is in the purview of the Ministries of Economy and Regional Development, and still under the Ministry of finance because of the state’s share of capital of IFD.
however, remains in office the installation committee, led by Paulo de Azevedo Pereira da Silva (former Director-General of the Millennium investment banking), which has the vowels in his team Carla Chousal (former administrator of BPI and RTP) and Nuno Miguel Soares (former BCP).
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