V. Vasiliauskas: it is crucial to as quickly as possible ensure a greater variety of alternative financing measures for small and medium-sized businesses
The Chairman of the Board of the Bank of Lithuania, Vitas Vasiliauskas, on 12–13 September will participate in the informal EU Economic and Financial Affairs Council’s (ECOFIN) meeting in Milan, where the governors of the central banks of the EU countries and ministers of finance will aim to reach a decision on directions of long-term economic financing. During the meeting, bank asset quality review and bank stress testing issues will be discussed.
“The financial sector and real economy is a system of inter-connected vessels, therefore it is natural that issues of bank supervision and financial incentive for the economy are discussed at the same level and at the same time,” said Vitas Vasiliauskas before the meeting began.
According to him, right now, when economic growth remains subdued, investment volumes are insufficient and the geopolitical environment — restless, Europe, now more than ever, needs such a regulation measures toolbox that would not only strengthen the financial system, but also encourage more active financing of the the economy, particularly small and medium-sized businesses.
“I would describe the current state of the EU economy as an ‘either-or’ situation; therefore, a fundamental agreement on the priorities of long-term economic financing need to be reached not someday, but as soon as possible,” said V. Vasiliauskas. He noted that it is important to rapidly take measures that would ensure a greater variety of alternative financing measures.
According to the Governor of the Bank of Lithuania, alternative financing sources in particular is the most perspective direction in seeking to create greater competitiveness among banks, the main economic creditors, while the economy should have stable financing sources, which would be more easily accessible to small businesses that make up the backbone of the economy. In his assessment, currently the EU’s capital market is not developed enough to be accessible to the smaller businesses and thus create an effective counterweight to the banking sector.
The meeting also plans to consider issues of EU financial stability and international cooperation in the field of financial services; information on the newest element of the banking union — the single supervisory mechanism — will also be discussed.