THE PUBLIC-POLICY ROLE OF THE EUROPEAN INVESTMENT BANK WITHIN THE EU

Despite the increasing sophistication of private financial markets in Europe, the European Investment Bank (EIB) has been expanding as never before. Is the Bank just one among many large banks prepared to provi de project finance in Europe, or does it have a distinct public policy role? We argue that its main distinguishing role to date has been to bring competition and efficiency to the less efficient banking markets . But new initiatives envisage a move to more EIB involvement in loan guarantees and equity investment. We review the potential here and off er some cautionary remarks.