Expanding Commercial Banks' Participation in Regional Investment Activity (Zenodo)

Summary

• The paper examines regional trends in fixed capital investment and banks' capacity to finance investment projects, using data for 2019 and 2023.p.1
• A long-term funding base is essential to expanding banks' investment capacity.p.2
• Securities issuance can diversify funding sources, but a mismatch in maturity and cost with project cash inflows may increase refinancing needs.p.2
• Regional investment policy should move beyond aggregate indicators towards project-level analysis.p.2
• Long-term funding options include long-term deposits, bank bonds and credit lines from international financial institutions.p.2

Key insights

1. Fixed capital investment is associated with renewal of production capacity and infrastructure development.p.1
2. Regional project portfolios should be developed within the bank's overall asset and liability management framework.p.2
3. Banks should assess market demand and the stability of cash flows when selecting projects across regions.p.2
4. Banks should systematically analyse regional sectors, existing enterprises and infrastructure to identify investment needs.p.2
5. Funds mobilised should have maturities matching the payback periods of investment projects.p.2