The Role of Banks, Equity Markets and Institutional Investors in Long-Term Financing for Growth and Development

One of the greatest potential threats to future global prosperity is a shortage of key infrastructure in both emerging and developed economies. Since the financial crisis, traditional sources of infrastructure investment financing have all been facing challenges – be it constraints on government spending, capital constraints on banks, or a weak economic outlook inhibiting corporate investment.

With more than $70 trillion in assets, institutional investors (such as pension funds and insurance companies) are frequently cited as an alternative source of financing. But they struggle to make higher allocations to infrastructure due to regulatory barriers, fund sizes, and a lack of transparent information, among other reasons.

Oliver Wyman’s Global Risk Center is supporting work by the Organisation for Economic Cooperation and Development (OECD) to improve the conditions for long-term investing. In February 2013 The OECD prepared a report on for a meeting of G20 Finance Ministers and Central Bank Governors in Moscow. The Role of Banks, Equity Markets and Institutional Investors in Long-Term Financing for Growth and Development examines the causes for the recent disruption in long-term financing and calls on policy makers to foster a more conducive environment for investing in infrastructure.