Aldo Romani, managerial advisor in the euro division of our capital markets directorate and Laurent Maurin, senior economist in the economic studies division at the European Investment Bank are on the show again and we talk about the sovereign debt crisis, the flaws in the Eurosystem exposed by the crisis, criticisms of the euro, and the measures adopted since to strengthen the euro area. These include the Capital Markets Union and the Banking Union, so tune in if you want to hear what these...

337 million people can’t be wrong, right? That’s how many people live in countries that have adopted the euro as their currency. But the history of the euro is rather short—so far. And as our guests this week, senior economist in the economic studies division at the European Investment Bank Laurent Maurin and Aldo Romani, managerial advisor in the euro divison of our capital markets directorate point out, it took the dollar a lot longer to become the well established, liquid, and stable...

If there's one thing Mideast countries need, it's potable water. Thanks to a series of technical assistancestudies managed by the European Investment Bank, the Red Sea-Dead Sea pipeline will be a vital solution to the water crisis.Technical assistance brought the pipeline to this advanced stage. Water engineer Harald Schölzel and water economist Edouard Pérard came on A Dictionary of Finance podcast to explain how technical assistance works in the context of a major development project like...

We invited Aglaé Touchard-Le Drian and Gunter Fischer, investment officers with the European Investment Bank’s Global Energy Efficiency and Renewable Energy Fund, to explain it. We quickly realized that without pen and paper, and several years of post-graduate studies, we wouldn’t really be able to fully get it. But we did find out some useful facts about IRR.

In this week’s episode of ‘A Dictionary of Finance’ podcast by the European Investment Bank we talk about the intersection of the private and the public sector in development finance. Specifically, we talk about how the public investment and development banks make projects bankable for the private sector. And make themselves obsolete in the process! As Aglaé Touchard-Le Drian, investment officer with EIB’s Global Energy Efficiency and Renewable Energy Fund (GEEREF), puts it rather more...

You—yes you—have been the subject of a KYC examination. No, not by your doctor. By your bank. KYC stands for Know Your Customer, Know Your Client or (in the case of a bank) Know Your Counterparty. It is the initial process by which a bank ensures that its client is not involved in money laundering or other activities that are illegal or could damage the bank’s reputation. If you’ve ever opened a bank account, the information you had to hand over to the bank was part of its “Know Your...

Learn about the social and business reasons for the “technical assistance” that helps companies and public institutions make their projects bankable. Technical assistance helps make projects bankable by preparing documents, carrying out studies, examining financing alternatives and assisting with contracts, among other things. The aim is to prepare a project to deliver on the purposes for which it was originally conceived. The European Commission finances technical assistance programmes to...

Completely by coincidence, the April 1 episode of ‘A Dictionary of Finance’ podcast by the European Investment Bank starts with a comedy sketch acted by Ildiko Buruts, head of the contract reviews and amendments unit, and Christian Kyster, head of the loan administration unit at the Bank. For your listening pleasure, they present a hilarious anecdote about the back office! We invited Christian and Ildiko out of the back office for about 25 minutes or so to tell us about what goes on there. ...

If you were anything like us, you imagined the treasury being something like Uncle Scrooge’s pool of coins in Duck Tales, into which he would dive regularly (and, mysteriously, not causing himself any injuries). You might be surprised to find out the ultimate goal of the treasury is to end every day with zero in cash. This is especially impressive given the amounts of money that passes through the treasury of a bank. The European Investment Bank’s treasury last year settled EUR 8.5 trillion!...

A fund of funds gives investors a diverse portfolio and gives fund managers long-term capital to invest. There are three phases to the lifetime of a fund of funds: Fundraising, which takes 12 to 18 months The investment period, where the fund makes new investments over the course of about five years The divestment period, during which the fund exits its investments, takes its profits and returns the money to its investors. So A Dictionary of Finance got three experts on funds of funds...

It is pretty obvious that you can empower women by providing more financing for female entrepreneurs, and financing technology that makes banking services accessible to women in remote places. Or by investing in the care economy, services for child and elderly care, where women carry typically the larger burden. What may be less evident is that financing parking spaces, roads and public transport may have a gender impact. Even in France, 90% of women have experienced sexual harassment using...

If you like Italian mineral water, maybe you’d also enjoy an Italian hydrobond. It won’t rehydrate you or go nicely with a fettucine Alfredo, but it might be a good long-term investment and it will keep water prices under control for the consumer. “It’s a sexy name for something quite plain,” says Thomas van Gilst, head of water security and resilience at the European Investment Bank. “The idea was to make a product that institutional investors would want to buy.” Thomas and colleague...

Did you know that, most likely, you are a beneficiary of structured finance? So before you go bashing opaque financing structures that you think caused the financial crisis a decade ago, please make sure you know what you are talking about – or at least give this episode a listen. Milena Messori, head of division for EIB’s intermediated finance for micro-, small- and medium-sized enterprises and Karen Cannenterre, structured finance officer within that same division, explain to us how...

This would not be a complete Dictionary of Finance if we did not reference at least once Gordon Gekko’s famous line “Greed is good” from the 1987 movie “Wall Street”. So here goes: Over the past four years or so, central banks have been trying to set a greedy example to commercial banks, hoping greed is contagious and will infect them all in turn. How so? Remember that in one of our first episodes we learned about interest rates – how and why they are set? In this week’s episode we find out...

Wow, what a week this has been! Since Sunday, when our first episode on Bitcoin went live, the value of Bitcoin has come down from around USD 8000 to below USD 6000 and back up to almost past USD 8500 again. You may dismiss this as yet further proof of how unhinged cryptocurrencies are, the week has been pretty crazy for various assets, so don’t go jumping to conclusions yet—at least, not until you’ve given a listen to our follow-up episode that answers the question what you can and cannot do...

Bitcoin has been all over the financial press throughout the past year or so, thanks to huge volatility (an investment of USD 100 into Bitcoin would have been worth over USD 6.5 million in December, but has since lost half of its value) so we thought we need to try to be able to sound like we know something. Just in case the topic should come up during dinner conversations. Let’s make one thing clear immediately. The European Investment Bank does not lend in any virtual currency, it does...

In concessional finance, loans have more advantageous terms than usual, to support a development objective Impact finance funds financially sustainable projects that have difficulty finding finance because of some perceived risk Heike Ruettgers, head of development and impact finance at the European Investment Bank, joins us on this week’s A Dictionary of Finance podcast to explain these two terms, which are key to development finance. Heike points out that concessional finance differs...

The corporate balance sheet explained—from the reason companies make one, down to the obscure terms that appear on it.  If you’ve ever mixed up your left and right, you could just as easily mix up your assets and liabilities. One of them goes on the left-hand side of the balance sheet, while the other goes on the right. Which one goes where? Okay, the assets are on the left. But you’ll find this and many other details of the corporate balance sheet explained in this week’s podcast. Marius...

If you’ve wondered what a naked short sale is, here is the long and short of a practice that’s often looked at askance by financial traders: short selling.   Sandeep Dhawan came on A Dictionary of Finance podcast to talk about shorts. He explained how naked short sales work, as well as how covered shorts work, and mentioned that short sales are often seen as somewhat immoral, even though they are legal. “Shorting should be natural activity,” says Sandeep, who works in the Treasury...

Equity and bond markets collectively are known as the capital markets. The capital markets are mechanisms for raising capital, transforming savings productively into investments, so that companies can produce goods and services for the economy. We get the low-down on how the capital markets work, in a discussion that lays out exactly how technology has changed the traditional image of a bunch of traders yelling at each other on the floor of a stock exchange. Sandeep Dhawan came on A...

Collateral is more than just a fairly good Tom Cruise movie. It’s also a Jamie Foxx movie… Actually, what we’re really talking about on our podcast this week is financial collateral. This kind of collateral has become more and more important since the financial crisis, because it reduces the risk to lenders that they’ll never get their money back. Peter Balaz came on the podcast A Dictionary of Finance to talk about how the use of collateral—and the markets that have grown around it—have...

On episode 14 of A Dictionary of Finance podcast, Paulina Brzezicka told us all about equity stories and credit stories. In fact, she did it so well, we brought her back to tell us about the bioeconomy and circular economy on our latest episode. Both are buzz words in commerce just now, so we wanted to make certain we knew what they were really all about. Paulina, who’s an advisor in the Innovation Finance Advisory Division at the European Investment Bank, says that most consumers will have...

We asked two experts, How do economists use economic models? The answer: to project current data into the future. Lots and lots of data. Economic models help economists understand how things work by reflecting things that can’t be observed directly and by projecting forward Natacha Valla and Georg Weiers came on the podcast to talk about how economists use models—as well as to give us specific examples of how the European Investment Bank used a model to figure out the impact of the billions...

Investment has been neglected in Europe since the financial crisis a decade ago, according to the European Investment Bank’s annual Investment Survey. But what effect does that really have? To answer that, first we back up and ask: What is investment? Why does it need to keep increasing? Investment is the acquisition of goods that are used in the production of other goods and services. Those goods and services are used to produce something in the future. Still, the definition of investment...

Climate change is a vital issue for the future of the world, and climate finance is key to confronting it. You get the lowdown on this supremely important subject on the European Investment Bank’s podcast A Dictionary of Finance this week. We interview Nancy Saich, senior technical advisor in the EIB’s Environment, Climate and Social Office, and Martin Berg, investment officer in the Infrastructure Funds and Climate Action division of the Bank. Nancy starts with definitions of climate...