Banks, Financial Services, Lithuania
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Thursday, 25.04.2024, 06:28
Lithuania may ask EU commission for technical help on national development bank
Deputy Economy and Innovation Minister Jekaterina Rojaka,
the head of a special task group, said on that Lithuania could receive experts'
conclusions in about a year.
"The task group has analyzed the current situation as
to the availability of financing markets and found that small and medium-sized
businesses are experiencing difficulties in accessing financing today,"
Rojaka told. "It is especially difficult to get
financing for start-ups and young companies operating for up to three
years".
"Some potentially economically viable and important
projects are not being carried out, so changes in this area are
necessary," she added.
The group has analyzed several possible options, each with
its advantages and disadvantages, and decided that a more in-depth analysis is
needed for the optimal solution, according to the vice-minister.
"Our proposal is that the government apply to the
European Commission for technical assistance under the Structural Reform
Support Program on the establishment of the National Development Bank and on
the issue of retail financial services," she said.
The task group considered three options for setting up a
state-owned development bank. The first option calls for consolidating
Lithuania's existing national development agencies – the Agricultural Loan
Guarantee Fund, the Public Investment Development Agency, and the state-owned
credit guarantee agency INVEGA.
The second option provides for setting up a holding company
on the basis of these agencies, and the third one calls for acquiring an
operating bank or setting up a new state bank.
According to Rojaka, the third option appears to be the most
expensive and lengthiest of the three. It requires a completely new legal
regulation and is the "riskiest" one.
The group was tasked with drafting proposals on how to
implement the parliament's resolution of June 26 on the establishment of a
National Development Bank and the state's participation in the capital of
credit institutions. The establishment of such a bank has been named an
economic project of national importance.
The European Commission says Lithuania's banking sector is
one of the most concentrated in the EU, which increases systemic risks. Three
biggest banks – Swedbank, SEB and Luminor – hold around 80% of the
Lithuanian market.
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