Stefano Gatti Reports to a G20/OECD Taskforce

Stefano Gatti (Department of Finance) was the only academic to speak, this morning, at the G20/OECD Task Force on Institutional Investors and Long-Term Financing meeting in Paris.

His report, Government and Market-Based Instruments and Incentives for Stimulating the Financing of Infrastructure, concludes that, in the wake of the collapse of public spending availability for infrastructure, the point becomes how to create institutional and market conditions able to attract private capital to a greater extent and from new investors.

The good news is that "data indicate the existence of a large, untapped potential amount of money available for infrastructure investments in the shadow banking system and the willingness of long term institutional investors to allocate more resources to this alternative asset class".

However, barriers to investments still exist, as exist trade-offs that need clear political responses: a transparent institutional framework is more important than financial support by the public sector in convincing private investors to put money into infrastructure.