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Development banks must reinvent themselves

2012

German regional development banks are facing major changes: Key areas of business such as the construction of public housing are becoming less important, while at the same time federal and regional funds for such projects are shrinking. Other traditional sources of revenue are also coming under more and more pressure.

Development banks urgently need to rethink their business models and adapt to the new reality. Interesting investment opportunities are emerging in areas such as modernizing buildings to reduce energy consumption and funding startups, for example. Germany's decision to phase out nuclear power will also generate an investment need of approximately EUR 200 billion over the next eight years.

Development banks should work in partnership with commercial banks. This requires a more professional approach on the part of development banks. Specifically, development banks need to review their internal structures and processes with an eye to efficiency.

These are the findings of a new study in the think:act Content series entitled "Development banks must reinvent themselves".

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