EIB Cites Reasons for Not Disclosing FI Information

21 January 2011

By Toby McIntosh

The European Investment Bank does receive reports from financial intermediaries about the loan they make, but that information is “not necessarily the subject of a specific report,” according to clarifications to Freedominfo.org provided by EIB officials.

The lack of such specific reports is one justification used by the EIB to explain its position that it does not need to disclose information that would allow for the assessment of the rate at which financial intermediaries loan out the funds provided by the EIB.  Financial intermediaries are used by the EIB to make loans, often to small and medium-sized businesses, for special purposes.    

The Bank in 2010 declined to provide information on the disbursal rate to a European group, the CEE BankWatch Network, which was studying the matter. (See previous Freedominfo.org article.) The Bank said it will only provide information after all the loans have been made. CEE Bankwatch contended that the rate at which the loans were being made to help fight the economic crisis, was important information, suggesting that faster disbursal was necessary.

The EIB’s justification for the not disclosing the information appears to rest on the several points: the lack of specific reports, and the idea that disclosing interim information would not give a “full picture.”

FI Reporting, But Not in `Specific Report’ 

The EIB agrees that it has the information on disbursals, provided by the financial intermediaries (usually large banks), but suggests that this reporting isn’t provided in a “specific report.”

In a January e-mail to Freedominfo.org, the EIB said:

The financial intermediaries must provide the Bank with information for each allocation from the loan made to an SME, allowing its identification and verification of compliance with the criteria laid down for the EIB Loan. This information is not necessarily the subject of a specific report, as the implementation status of any given loan is typically updated on an ongoing basis.

The information was provided by Hakan Lucius, Head of Division, Corporate Responsibility and Civil Society Division, Corporate Responsibility and Communication Department.

Similarly, the EIB said, it keeps track of its disbursals to financial intermediaries, which may be given in several installments. The EIB said, “Naturally, the EIB records internally these disbursements, but please note that these are normally not the subject of any formal report as such.”

Full Picture Exemption? 

In the correspondence, the Bank did not specifically tie its nondisclosure position for FI disbursals to a particular exemption in its Transparency Policy, but suggested that not disclosing the information was justified because the interim data would not provide a “full picture.” 

The Bank stated: 

In the process of providing CEE Bankwatch with the data they had requested (which led to their report on loans for SMEs through financial intermediaries mentioned in your article), we realized and explained to them that, for the purposes of their research, the full picture correctly reflecting the loans’ utilisation could only be given when a loan is fully disbursed and allocated. This is due to the fact that there are natural timelags between the approval of a loan by the EIB’s Board, the signature of the loan with the intermediary bank, the Bank’s disbursement of the different tranches to the intermediary bank, the final allocation of all the funds to the SMEs, and the intermediary’s final reporting to the EIB of how the funds have been given to the SMEs.

Use of Commercial Exemption Possible

The Bank also hinted in its replies that disclosure policy exemptions to protect commercial information could come into play.

It wrote:

The Bank would also normally inform upon request of the levels of disbursement on a specific loan, unless the disclosure of such information is covered by one or several of the exceptions described in the Bank’s Transparency Policy (such as, for example, if disclosure of such information would undermine the protection of commercial interests of a natural or legal person, in which case the Bank would assess if there is an overriding public interest to disclose this information, in line with §5.2.3, Part A, of the Policy).

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Filed under: IFTI Watch


In this column, Washington, D.C.-based journalist Toby J. McIntosh reports on the latest developments in information disclosure in International Financial and Trade Institutions (IFTI).
Contact: freeinfo@gwu.edu or
1-(703) 276-7748