Bancherul - BANCI / ENGLISH / EBRD President Lemiere stepping down after eight years

EBRD President Jean Lemierre said on Sunday there was ever more need now for the high quality investments of a strong European Bank for Reconstruction and Development as financial and economic risks increased around the world, said EBRD in a press release.

Speaking to the Bank’s Board of Governors in Kiev as he prepares to step down after two full terms as President, Mr Lemierre looked back on profound and successful changes in the EBRD region over the years since the collapse of communism.

The prospects were positive but turbulent financial markets and increased investor hesitancy also gave rise for caution. “Once again, difficult times are a reminder of the need for a strong EBRD as a committed investor with high standards,” Mr Lemierre said.

Volatility might put at risk the hard-earned reforms that have been achieved in the region, he added.

The EBRD region had changed dramatically since he had assumed the presidency in 2000, Mr Lemierre noted. Countries then were still reeling from the financial collapse in Russia of 1998. It was a time of poverty, corruption and pessimism about life in the free market.

Now there was a solid financial sector in most countries, cross boarder trade had increased and a middle class was emerging with more ambition and appetite for economic and political freedom.

Mr Lemierre said that during this period the Bank had proved it was a committed, long term partner and that it was creative in meeting new challenges with market solutions. The Bank is “profoundly entrepreneurial”, he said. It is a model that works.

In addition to supporting the private sector – providing funding for more than 3 million small and medium sized enterprises – the EBRD was also innovative, offering practical business-led solutions to the issues of global warming and the global food price spiral.

Its ability to anticipate trends and adapt to evolving needs of the region rests in the Bank’s approach of constantly challenging its own perceptions by listening to leaders, clients and the people of the region, he said.

Mr Lemierre said that one of the EBRD’s key strengths is its multilateral shareholding base. It was a far better institution because of its non-European shareholders. It was a better institution because the countries where it invested were also EBRD shareholders.

Referring to the use of the EBRD’s net income of €1.1 billion for 2007, Mr Lemierre noted governors were being asked to approve a resolution that roughly 10 percent of earnings go to a new fund to provide technical cooperation financing to help facilitate future investments. A similar amount was being donated to support work to make the site of the Chernobyl nuclear plant safe.

However, he stressed that 80 percent of earnings, according to the resolution before governors, would be earmarked for reserves. This was to ensure that the Bank had the capacity to carry on investing around the record levels seen last year, he noted.

The Board of Directors had set out a very clear map to sustain the momentum of investment activity within a framework that protects the Bank’s capital for use beyond 2010 when the next review of resources takes place, Mr Lemierre said.

Looking to the Bank’s future, the President said the EBRD countries of operations were clear about their wish to see the EBRD continue to adapt and re-focus so that it can continue to address a transition mandate that they see as far from over.

“That mandate will certainly be reinforced by a warm welcome from shareholders for the prospect of Turkey becoming a country of operations,” Mr Lemierre said.