Philip Bennett on Public Policy Delivery Through Private Sector Investment
Philip Bennett *79 has accrued more than 30 years of experience in global financial markets since graduating from the Woodrow Wilson School with a masters in public administration. Today, he puts his considerable skills and experience to use as the first vice president and chief operating officer of the European Bank for Reconstruction and Development (EBRD). Recently, Bennett presented a JRCPPF-sponsored talk on the EBRD, “Public Policy Delivery Through Private Sector Investment.”
The EBRD, formed in the early 90s, currently invests in 36 countries. EBRD is particularly focused on economically and politically challenged regions; among the bank’s core objectives are to encourage environmentally sound and sustainable development, mobilize significant foreign direct investment and, ultimately, to improve people’s lives in these regions.
Bennett began his presentation by describing EBRD’s overarching philosophy, in particular their cooperative brand of banking: “We do not compete with other financial institutions. Our point is to facilitate finance where it is needed. Everything we do needs to be ‘additional’,” he explained—not competitive, or seeking to replace available funds from elsewhere in the region. Quite the opposite, they invite other banks or investors to participate in co-financing their operations when possible.
Aside from making loans and taking equity positions in private enterprises, and, to a lesser extent, investing in their public sectors, EBRD also buys into (and, in some cases, transforms) the exchanges of their regions. Bennett shared a case study on the stock exchanges of several regions, discussing their investments in countries like Turkey, Croatia, Russia, and Romania. “During my three-year tenure [at EBRD] we’ve become very aggressive at building our investments in market exchanges in our regions,” he said. Often, “we’re transforming the way the exchanges manage themselves.” This kind of investment can have two-fold benefits; it can make the exchanges more approachable for outside/international investors, and it can give EBRD leverage to work with governments on key public policy issues.
For example, EBRD now owns just over 5% of the Bucharest Stock Exchange (BSE). Bennett shared how this investment recently created an effective policy dialogue. The BSE and EBRD worked together to develop a new corporate governance code for companies whose shares are admitted to trading on the regulated BSE market. The new code came into force this January, and promotes higher standards of governance and transparency.
Bennett’s presentation sparked a vibrant Q&A session at its conclusion, and we at the JRCPPF thank him for sharing his work and his passion with us .