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 help ...
Apr 08, 2018•21 min
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. Chr...
Apr 01, 2018•25 min
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! Whi...
Mar 25, 2018•29 min
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 from the E...
Mar 18, 2018•26 min
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 publ...
Mar 08, 2018•18 min
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 Patricia ...
Mar 04, 2018•23 min
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 structured...
Feb 25, 2018•31 min
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 what...
Feb 18, 2018•27 min
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 wi...
Feb 11, 2018•19 min
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 not rai...
Feb 04, 2018•27 min
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 from tra...
Jan 28, 2018•21 min
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 Cara, w...
Jan 21, 2018•27 min
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 Department of th...
Jan 14, 2018•13 min
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 Dictionary o...
Jan 07, 2018•35 min
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 expande...
Dec 17, 2017•25 min
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 of e...
Dec 03, 2017•28 min
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 and i...
Nov 26, 2017•29 min
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 terms, in...
Nov 19, 2017•28 min
Green bonds ensure that an investment addresses climate change, the degradation of environmental systems, or biodiversity loss. When Aldo Romani developed the first Climate Awareness Bond ten years ago for the European Investment Bank , he wanted small investors to be able to participate, so a commitment of as little as EUR 100 could buy a piece of that issue. Now the green bond market is USD 200 billion and it has “captured investors’ imaginations,” Aldo explains on A Dictionary of Finance podc...
Nov 12, 2017•29 min
How to turn nature from a charity case into a sustainable asset class. Environmental finance uses financial tools for the good of the environment, working to determine the right price for the use of environmental resources and who should pay for them What if we extended our outlook from the next quarterly results to the next few centuries? We would most likely find that the true cost of natural resources used in various commercial activities is not represented in most cost-benefit analyses of bu...
Nov 05, 2017•30 min
Quasi-equity and hybrids raise financing for different kinds of companies without diluting their equity holders. How does that work? Quasi-equity is a contingent and participating loan, meaning that its profits are contingent on the success of the company and that it participates in the risk and the potential upside. A corporate hybrid bond has characteristics of equity and debt, so that some of the bond can be accounted for as equity on the company’s balance sheet, keeping its credit ratings st...
Oct 29, 2017•26 min
Smart city finance is based on an integrated smart city plan, in which a range of technological innovations are used to create a better city to live in. At least, that’s what smart city finance should be about. Sometimes cities think they’re smart, because they’re using lots of technology. But they aren’t truly smart until they create an overall vision for the smart city. Smart cities go beyond the “wired city” or “intelligent city” by including a comprehensive plan, says the European Investment...
Oct 22, 2017•27 min
The DIGITAL ECONOMY consists of all the transactions carried out over digital infrastructure or using digital technologies, including e-commerce. In fact, anything with an “e-” in front of it is part of the digital economy. It’s not just Facebook and Amazon, but even traditional companies that are part of the digital economy. The FOURTH INDUSTRIAL REVOLUTION represents the shift in business to an increasingly digital form of operations. Swedish company Assa Abloy was a traditional firm making lo...
Oct 15, 2017•25 min
If you wanted your money to help society, you used to be limited to giving it to charity or refusing to invest in “sin” businesses, like gambling. But companies are figuring out ways to make good deeds profitable with an investment approach called impact investing. Allar and Matt are joined on the podcast by Uli Grabenwarter of the European Investment Fund , who explains how considering the benefit a company has on society can actually be profitable. Hosted on Acast. See acast.com/privacy for mo...
Oct 08, 2017•13 min
Ahh, Switzerland – the land of cheese, chocolate, and… banking regulation? While you may not associate the alpine nation with strict rules on financial institutions, if you come across speakers of Financese, you will hear about the Basel committee. From what we gather, the Basel rules have become the agreed way of doing things. What things, you might ask? Risk management things mostly: measuring capital adequacy, leverage ratios, etc. To help us sort out everything, we are joined once again on ‘...
Oct 02, 2017•25 min
On this week’s episode of ‘A Dictionary of Finance’ , Matt and Allar learn about credit stories and equity stories. As it turns out, these stories are a little different from your average bedtime fare – in fact, it is critical that bankers and other financiers not fall asleep while you tell them your story! We find out that (we’re simplifying here) pension fund managers are more likely to enjoy a story beginning with “Once upon a time…”, while angel investors, not surprisingly, would much rather...
Sep 24, 2017•23 min
Do not pass Go. Do not collect $200. And do not play Monopoly, if you want to learn about finance. Instead, play a game that Vincent Thunus, head of regulation and best banking practice at the European Investment Bank developed to teach interested high-school students in Luxembourg about what kinds of risks banks (and thereby, its shareholders and clients) may face, and what banks need to do to manage those risks. So we invited two other colleagues, Sophie and Chris, to sit down with us and Vinc...
Sep 17, 2017•29 min
A Dictionary of Finance discovers that venture capitalists aim to make their money through innovative companies that ‘disrupt’ the way things have been done before. Venture capital is risk capital that finances innovation. Risk capital is used to finance innovative companies that a typical bank would think too risky. If you want to set up a bakery, your local bank will probably be able to predict whether it will be a success or not. If it’s a yes, they’ll lend you the money to rent a store and e...
Sep 10, 2017•22 min
Financial engineers don’t wear hard hats, even though some of the stuff they figure out is so complicated it might at first feel like a punch in the head. Don’t worry. Our expert explains how financial engineers work, in terms that anyone can understand. Financial engineering is the application of mathematics to financial questions, typically using computer models. Thomas Ribarits, who heads the European Investment Bank’s financial engineering division, explains what financial engineers do. It’s...
Sep 03, 2017•23 min
In this episode of ‘ A Dictionary of Finance’ podcast we invited Per-Erik Eriksson, head of inclusive finance at the European Investment Fund , and Hannah Siedek, impact microfinance investment officer at the European Investment Bank , to explain to us what microfinance is. We hear stories from sub-Saharan Africa, where Hannah used to work, about borrowers who, barefoot, would be intimidated by the freezing cold, air-conditioned buildings of traditional banks, and wouldn’t dare to go in. But who...
Aug 27, 2017•28 min
