Bankwatch

Home > Archives for Blog entry

Blog entry

The EIB finally limits coal lending

Last Friday, the EIB published a new energy lending policy, which shall be in place for some five-six years. Already in a draft, the EIB had stated that it would limit coal lending, but loopholes remained (pdf).

In the weeks up to the day when the bank’s Board voted the final version of the policy (July 23), many actors have been pushing the bank to do more, including the European Commission and various EU countries which are stakeholders of the bank.

And we did see last minutes positive changes, when the bank improved the draft following an explicit request by its Board to close some of the loopholes.

All eyes are now on the third major international (public) financial institution which still lends to coal: the European Bank for Reconstruction and Development.

Read more

Our campaign to end coal subsidies from international financial institutions.

Find updates, data and more

The policy we have on the table today practically eliminates financing to the most carbon intensive power generation projects by introducing an Emissions Performance Standard (EPS) at the level of 550 g CO2/kWh and its own carbon pricing (€ 28/tCO2 in 2013 and € 45/tCO2 in 2030). This means in practice that most coal power plants can no longer be financially supported by the EIB unless they co-fire at least 25% biomass or are high efficient co-generation installations.

When pushed by its Board to close loopholes, the bank agreed to discard exemptions for the financing of the peak power plants exceeding the EPS and limited the exemption based on “security of supply” argument to one clearly defined situation: when the project is on isolated energy systems such as small islands with no feasible mainland energy connection ‐ and even then only where there is no economically viable alternative.

Additionally, the bank limited the application of exemptions to the EPS rule for projects in countries outside of the EU only to low income countries (listed by the World Bank) and in the situation where the project would have a significant positive material impact on poverty alleviation and economic development.

At Bankwatch, we were happy to see the improvements proposed by the Board to the new EIB energy policy. We think it is important that the Board listened to the arguments made by several organisations and actors who, after seeing the draft, called for restricting the EPS exemptions. The fact that the EPS level will be reassessed – and potentially lowered further – next year is also a significant breakthrough.

The new EIB policy came just one week after the World Bank too had announced major restrictions to its own coal lending. So all eyes are now on the third major international (public) financial institution which still lends to coal: the European Bank for Reconstruction and Development.

The EBRD published July 25 its new draft energy policy which is very disappointing when it comes to how much coal – alongside oil and gas – projects could still receive public funds.

The EBRD definitely has much to improve in its draft policy: they should start by eliminating financing for coal and other high carbon new power plants as well as for the rehabilitation of existing high carbon power plants and stop the financing of oil and coal extraction. Another area where the EBRD can follow the good example set by the EIB is in investing more in housing renovation, including in the energy efficiency of public buildings. Such lending would bring much better transition and energy security impact than more centralised fossil fuel based power plants or fossil fuel extraction fields.

[Campaign update] EBRD not digging for truth at the Kolubara mine, Serbia


The longer we are monitoring the Kolubara mining operations and the way people are being treated by the mining company, the more obvious it becomes that the European Bank for Reconstruction and Development is not able to monitor and influence its client’s conduct and that it is not able to uphold the rights of local residents vis-à-vis the omnipotent Serbian energy monopolist EPS.

The latest, and maybe most blatant example is a two year delay in establishing a grievance mechanism that stipulates how and where locals can get information about their rights and the compensation process and where they can complain about misconduct by the Kolubara mining company (a subsidiary of state electricity company EPS), specifically concerning expropriations.

Here the details:

  1. The Stakeholder Engagement Plan (pdf) for the Kolubara “Environmental Improvement Project” from February 2011 stipulates that a grievance mechanism will be established and made public by March 15, 2011.
  2. Responding to requests for information from CEKOR, the EBRD wrote
    • on February 14, 2012 (one year later) that “the public has been notified about the existing complaints procedure”
    • on April 17, 2012 that “[p]eople who are directly affected by resettlement or expropriation are informed via a number of means, including public meetings, in writing and most importantly in person at their homes.”

    Both statements were based on information from EPS.

  3. A few days ago, EPS told us in a letter (pdf, own English translation of Serbian original (pdf)) that the grievance mechanism only came into force on February 20 this year – two years later than scheduled and one year after EPS told the EBRD that the mechanism already existed and was known to the public.

What may have been known to the public earlier is only the contact person for complaints, SEP Team manager Zoran Markovic, appointed by EPS. Without an established procedure how to deal with grievances, however, this can hardly be comforting for people who don’t have much reason to trust EPS.

When the European Bank for Reconstruction and Development gets involved in a controversial project, it often claims that its involvement will improve the environmental and social standards of the activity and the project company. When it comes to enforcing these improvements however, the bank regularly shies away from putting pressure on its clients and relies on their reassurances that everything goes according to the agreed standards.

Not only took it EPS two years to establish a complaint mechanism. The EBRD apparently accepted the company’s claims at face value without verifying the information. Whatever the reason for this (capacity impasse? naive trust in EPS? sloppiness?) it’s an intolerable oversight on the part of the EBRD, leaving local communities to themselves.

* Campaign updates on the Bankwatch blog highlight news from projects we monitor as well as from our member groups and partners.

PPPs “poor in practice” admits new EBRD-financed study


A few days ago I did a double-take when the EBRD sent out a press release calling PPPs in central and eastern Europe “Pretty on paper, poor in practice”. What could have happened to make the EBRD turn against one of its most dearly-held infrastructure funding models? Had a Bankwatch secret agent infiltrated the EBRD media department?

On closer inspection it turned out that the press release accompanied the release of the first Economist Intelligence Unit regional Infrascope study (pdf) for Eastern Europe and the Commonwealth of Independent States, and in fact despite the surprisingly frank headline, much of the study is in fact exactly what one would expect from an EBRD-financed study.

There is no such thing as additional private finance for infrastructure. In the end the public will always pay, and pay dearly. If the public sector can’t afford to pay directly for infrastructure, then it can’t afford PPPs.


Not a silver bullet for public infrastructure. Our website Overpriced and underwritten exposes the hidden costs of public-private partnerships.

Although there is huge variation in the countries surveyed, none of them are doing well on all the criteria surveyed. Some have better institutional set-ups (Croatia, Latvia), some have more actual projects experience (Turkey, Hungary), some have better legislation (Croatia, Lithuania), but none of them have all the elements that the study authors consider necessary to achieve perfect PPP project.

Even the top scoring country, Croatia, only scores 63.5 out of 100, and let’s face it, if Croatia is the top-scoring PPP country then something is quite wrong.

According to the definition of PPPs used for the study, Croatia has only done three PPP projects – most of the points it scores come from its as yet relatively untested legal and institutional framework.

Our own research on Croatian PPP projects such as the Zagreb wastewater treatment plant and Arena Zagreb shows that in practice they have proved to be very poor value for money for the public.

So it seems that there is wider and wider consensus that PPPs are not doing well in practice in central and eastern Europe. But it is in the reasons given and the conclusions drawn from this experience that the Economist study starkly differs from the increasingly broad range of PPP critics.

Among the prominent criteria measured as an ingredient for success are the legal and institutional frameworks in the countries. Yet while these are obviously needed if a country decides to pursue PPPs, it is unlikely that the best legal and institutional framework in the world can overcome the largest problems with PPPs: the accumulation of off-balance-sheet debts and the impossibility of truly transferring risk to the private sector when essential public services are at stake.

The countries in the region which have implemented multiple PPPs (Hungary comes to mind) have found this to their cost. The study does point out that private partners in Hungary effectively received a guarantee from the government that their costs would be met, thus exposing the government to significant commercial risk. But it appears to suggest that Georgia’s approach of transferring maximum risk to the private sector is a viable alternative. However this is false, as it is usually the public that finally has to pay for any unforeseen issues in projects or service price increases, as the private sector will not be willing to do without profits and the public cannot do without essential services.

The study also cites lack of political support as a reason why PPPs are not doing well in some countries (eg. Hungary, Slovakia) and points to governments not adhering to commitments made by previous administrations, as if this phenomenon is purely the result of fickle governments changing their opinions as often as their underwear. But this is not a cause of PPPs not doing well, it is a result of previous governments implementing poor quality PPPs and/or too many PPPs.

Successive Hungarian governments have spurned PPPs since 2009 not because they are fickle but because previous governments had clocked up high levels of hidden debts by carrying out over 100 PPP projects, some under highly unfavourable terms. Likewise the Slovak government which came into office in 2010 did not refuse to prolong the extension for the financial close of the D1 motorway project because the colour of the project papers didn’t match their suits – it let the PPP collapse because it was extremely expensive and had never been convincingly proved that it was a better option than building the motorway using a usual public procurement model.

Unsurprisingly, such blind spots lead the study authors to the conclusions that 20 years of failure is simply an invitation to try harder. That giving up is not seen as an option is already clear in the Executive Summary, which says “the logic behind PPPs remains inescapable: infrastructure gaps require filling, and governments often do not have enough money or know-how to do it all themselves.” But there is another unmentioned logic which remains inescapable: There is no such thing as additional private finance for infrastructure. In the end the public will always pay, and pay dearly. If the public sector can’t afford to pay directly for infrastructure, then it can’t afford PPPs.

While we wouldn’t claim to have studied every circumstance under which a PPP project could be undertaken and therefore can’t claim that there is never a place for any PPP, 20 years of widespread failure in the region rather suggests it is time to try something else.

The obvious question would be what? The first and main answers are planning, prioritisation, and tackling wastage and corruption. There is no getting around the basic fact that some infrastructure is simply not affordable and hard decisions need to be taken. For that, honest public debate is needed about what are real priorities. Regional governments don’t need to dream up complicated alternatives to public procurement – first they need to get the basics right and learn to walk before they try to run.

New facts are busting energy myths


Energy is an important issue cutting across some of the big problems of our time such as climate change, security and the economic crisis. What sources of energy we use and how we finance them influence how our societies will function in the decades to come.

Good decision making therefore requires reliable information on the costs, impacts and potentials of different energy sources and financial instruments. The available information, however, can be dated or shrouded by tenacious myths. (A study published yesterday by the German Institute for Economic Research for instance has found that the European Commission’s strategy documents for the energy sector significantly underestimate the costs of nuclear and coal and overestimate those of renewable energy sources.)

Our friends at Counter Balance have therefore taken a look at a number of the myths and facts related to energy production, the EU’s energy policy and the financing activities of international financial institutions.

The outcome, a series of fact sheets, helps find answers (not always easy ones) to questions like “How does the European carbon market work?”, “Which sources of energy are expensive and which are cheap?” or “How reliable is the electricity production from renewable energy sources?”.

With the energy policy revisions of the European Investment Bank, the European Bank for Reconstruction and Development and the World Bank heating up, it’s all the more important to get the basic facts straight.

Here are some points to get you started.

EU carbon trading

  • Rather than enabling the transition away from a fossil fuel economy, the ETS has acted as a subsidy for major polluters in Europe.
  • Even conservative estimates suggest that between one- and two-thirds of carbon credits bought into the ETS “do not represent real carbon reductions”.

Download the factsheet on EU carbon trading

Europe & coal

  • Coal power plants may seem cheaper to construct when compared to renewables, but because of the very high temperatures in the burning chambers they require expensive and frequent maintenance – the yearly costs to maintain a coal power plant may be as high as 10% of the initial investment to build the plant.

Download the factsheet on Europe & coal

Europe and energy security

  • The EU recognises that to solve global environmental problems, a drastic reduction in its own use of fossil fuels is needed. At the same time, the EU is part of a global resource and energy race with other countries and its energy policy centres around the construction of a series of oil, gas, electricity and solar projects in neighbouring countries in order to diversify Europe’s energy supply.

Download the factsheet on Europe and energy security

EU policy and nuclear energy

  • Plans for new nuclear build face the challenge of finding investors and the large amounts of money needed for construction, making nuclear an economic liability for the project promoters. The 2012 World nuclear industry status report finds that five of eleven nuclear companies were downgraded by Standard & Poor’s in the past five years. Moody’s also assigns a higher risk profile to companies that pursue new nuclear generation plans.
  • Nuclear power and renewables are not complementary to another and cannot be used in parallel to reduce carbon emissions.

Download the factsheet on EU policy and nuclear energy

Shale gas

  • Together with other necessary equipment and storage ponds, fracking infrastructure can cover large areas. In Europe, such land use might potentially lead to problems because of population density.
  • Shale gas is still a fossil fuel and thus carbon-intensive. A study by the Commission confirmed that shale gas activities – including the process of fracking itself and burning of shale gas – release greenhouse gas emissions and are more carbon-intensive than conventional gas.
  • Every drilling process (for shale gas) requires as much as 15 million litres of water. In addition, every drilling operation uses several tonnes of highly toxic chemicals.

Download the factsheet on Shale gas

Renewable energy sources

  • In 2010, only 71.5 percent of energy produced in the EU was used by the end consumer. 23.5 percent of this energy was lost, with 5 percent used by the energy sector itself.
  • The strength of renewable sources of energy does not lie in the possibility to produce large amounts of energy in one place as is the case with fossil fuels or nuclear power plants. With renewable sources of energy, people can take control of their energy supply and support the independence of communities and regions.

Download the factsheet on Renewable energy sources

The European Investment Bank’s energy lending

  • While the EIB is an EU institution and is required to lend for projects in line with Europe’s policies on energy and climate change, the bank at times takes a schizophrenic approach to the energy sector because of the diverse EU policies and strategies related to energy.

Download the factsheet on EIB energy lending

Project bonds in times of crisis

  • With the Project Bond Initiative and the Project Bonds Credit Enhancement, the Commission and the EIB have chosen to incentivise the expansion of financial markets and to use public funds – derived from European taxpayers money – to transform infrastructure into an asset class

Download the factsheet on Project bonds in times of crisis

Energy infrastructure investments for economic recovery

  • In the last decades the EU has to a considerable extent externalised its “polluting” industrial production to countries outside Europe, giving a push to fossil fuels-based energy generation in these countries.

Download the factsheet on Energy infrastructure investments for economic recovery

UPDATED: A guide to examining the European Investment Bank’s energy lending portfolio


Originally posted on the Open Spending blog to coincide with a journalist community hangout where our EIB campaign coordinator Anna Roggenbuck presented her experience with the EIB’s data.

UPDATE (July 15, 2013): The EIB sent comments and clarifications to the original blog post from June 13 based on which the text has been updated. We include explanatory notes where revisions have been made. A detailed point-by-point exchange between Bankwatch and the EIB that includes a number of additional arguments can be downloaded as pfd.

How to understand data from the EIB – what does the data tell us?

For each project the EIB is considering to finance, it publishes on its website basic data including a description of the project, its location, the amount of EIB financing, in most cases the loan beneficiary and where relevant environmental impact assessments.

The data has its limitations: Machine-readable data is available on the website but it is not reliable because it significantly differs from the more detailed databases provided on request (see below). Furthermore, the aggregation of loan volumes can only be made at a sectoral level, pre-empting the possibility to examine different categories within the energy sector (energy efficiency, coal, gas and so forth.).

More detailed and accurate datasets for individual industry sectors are available on request, though not for all industry sectors (no transport database for instance) and you’ll have to wait up to one month for the file.

[In reaction to the EIB’s comments, we revised the original statement that “no machine-readable data is readily available, and it is not possible to aggregate loan volumes”. The EIB also pointed out that Bankwatch had received a number of databases within a few days. This, however, is not a general practice and when planning to examine EIB data, one has to be at least prepared for a longer waiting time.]

With these files you can relatively quickly aggregate and examine EIB lending in a certain country or region like old or new Member States and for different years. Slightly more complex, but still very much possible, is collecting data for sub-sectors (e.g. renewable energy). This is particularly useful if comparing for instance energy efficiency lending in the old Member States of the western EU versus the new Member States, where the potential of and need for energy efficiency measures is much higher. (Click on the “EE” circle (bottom-right) in the visualisation below to see more.)

At the same time, the data provided by the EIB is relatively sparse, and the files notably do not include the names of loan beneficiaries, which would allow assessing whether any companies receive particularly extensive EIB support and in which countries these are based.

Another problem is how the EIB categorises projects. Even though the bank uses an official Eurostat classification system (NACE), inconsistencies and unclear attributions create a much rosier picture about the bank’s lending. (See more details for the energy sector lending below.) Note that for a more critical assessment or investigation one needs to consult additional materials like project summaries, EIB project assessment reports (only available on request), or a project promoter’s website.

Why is it important to analyse the EIB’s classifications? The EIB energy lending as an example

The EIB boldly states that it is a leading institution in the fight against climate change. While the bank does lend significant amounts for renewable energy projects, it also finances a large number of climate-damaging projects.

What the EIB categorises as clean energy is often not clear. This is especially the case when portions of a particular loan are attributed to different, often conflicting EU priorities like financing for renewable energy and energy efficiency on the one hand and security of energy supply (to EU countries) and trans-European energy networks like gas or oil pipelines on the other hand.

By assessing each project individually, we found the following underlying trends in the EIB’s overstated green energy lending:

1. Unclear classifications

Quite a number of projects in the EIB database we simply removed because they did not seem to be related to energy, let alone renewable energy. For example all energy-related expenditures for the large-scale waste incineration plant Termovalorizzatore Torino were assigned to renewable energy. Since we argue that waste is not a “renewable” energy source, we excluded the project from our numbers. [*]

[In its comments, the EIB explained that the Poland Forestry and Environment project, which we had earlier used as an example here, contained an element of energy production from biomass. The information, however, can only indirectly be found in a 400 page pdf file available on the website of the Polish Ministry for Agriculture and Rural Development. In any case, the point we are trying to make here can be illustrated by a number of examples, which is why we replaced the one from Poland.]

2. Very broad strokes

In some cases, financing that clearly did not go to renewable energy sources was nonetheless added to the renewables figure, even though renewables was just part of that loan. In case of a project with the Italian power company ENEL the EIB assigned the loan to “Renewable energy” even though more than 50% of the total loan of 450 million Euro was aiming at fossil fuels. (See the excerpt from the EIB’s database below. Irrelevant columns were deleted to reduce space.)

[In its comments to the blog post, the EIB explained that the classification of the project was a mistake in the database we received and that “this mistake was subsequently corrected and never taken into consideration in the Bank’s public data regarding its energy lending”.]

3. Compartmentalisation

Somewhat in contrast to point two, the EIB in many cases focuses too narrowly on the specific activity they finance rather than taking the impact of a project as a whole into account.

For example loans over (approximately) 200 million euros in 2009 for the construction of a new gas power plant in Portugal are considered energy efficiency (and thus boost the bank’s ‘green energy lending’) even though the project lead to additional capacity to burn fossil fuels and thus emit CO2.

[In its comments, the EIB correctly pointed out that the original example (the Karlsruhe power plant) was not classified as energy efficiency in the database. The point we make nonetheless remains valid and is illustrated by another example, since we maintain that efficiency gains per energy unit do not justify a classification under energy efficiency when the project leads to an overall increase in CO2 emissions.]

This is especially problematic in the case of greenfield power plants in developing or transition countries that often have a significant potential to increase energy efficiency. EIB money that could be used for measures to decrease energy loss and consumption, has instead financed new and more efficient (or ‘less inefficient’) fossil fuel fired power plants to address growing energy demand.

What further questions can we ask?

While the EIB’s 2011 energy figures have improved over previous years, the share of fossil fuels is variable when considered over a longer period of time. It will be interesting to see whether the positive trend from 2011 continues.

Up to 30 percent of EIB financing is offered as ‘global loans’ to intermediary institutions like commercial banks and different investment funds. Details for such activities are almost never available due to confidentiality provisions by the financial institution. A more in-depth investigation into these loans and the financial intermediaries could offer insightful information on how climate-friendly the EIB’s global loans are.


[*] Confronted with our criticism of its classifications, the EIB argued that Bankwatch’s analysis was misleading as it lowered the EIB’s support for renewable energy (by not considering large hydro and waste-to-energy projects) and to energy efficiency projects (by neglecting efficiency gains of new co-generation projects). Yet, since Bankwatch’s methodology focuses on a sustainability objective it takes the wider impacts of projects into account, like biodiversity impacts of big dams or the climate impact of new, greenfield fossil fuel power stations (even if they are considered more efficient than old ones, they are still new fossil fuel plants). The EIB rightly stated that Bankwatch’s methodology was not in line with standard EU methodology, but we made our methodology transparent and explained and justified our choices.

The EIB and development, a chance to clean up the bank’s act


Cross-posted from the Counter Balance blog

“The European Investment Bank is not a development bank, it is an investment bank designed to support EU policies, including external action”, Werner Hoyer, the president of the EIB repeated in the European Parliament on Monday. Looking at the EIB’s investment portfolio, the facts prove him right: The development impacts of the 6 billion euros that the EIB invests annually outside the EU often remain unclear.

Nevertheless the EIB has a development mandate, explicitly mentioned in the Lisbon Treaty and reaffirmed by the European Court of Justice (pdf). The current review of the document that defines this mandate (see box) offers an opportunity for EU decision-making bodies to take a closer look at the widespread NGO criticism of the EIB’s external lending.

The EIB’s External Lending Mandate

The External Lending Mandate (ELM) (pdf) sets out the guidelines and priorities for the bank when lending outside of the EU. It determines the eligibility criteria for an EU guarantee for losses under loans when lending outside of the EU – except for ACP countries where the bank operates under the Cotonou agreement.

In theory when the EIB lends under its own risk these criteria don’t apply but in practice we see that the ELM determines the requirements for practically all its external loans. The next ELM will cover the period 2014-2020, with a mid-term review likely to take place in 2007.

The Commission’s proposal on the ELM has recently been sent to the European Parliament. The relevant committees will table their opinions in the next months and are expected to vote shortly after the summer, before the proposal goes to the Council following the EU co-decision procedure.

See more details on the legislative procedure >>>

Read more


Gaining control – A parliamentarian toolkit to get the EIB back on track

Counter Balance’s recommendations on the ELM (pdf – prepared in July 2012 for the European Commission’s assessment of the current external mandate of the EIB)

The proposed ELM text by the European Commission (pdf)

The issues raised include problems with environmental pollution and a questionable approach to sustainable development. At the moment, however, most attention is being paid to increasing allegations of fraud and tax avoidance that come with a lack of transparency at the EIB, for instance:

  • The continued controversies surrounding the Zambian Mopani copper mine project led Christian Aid to file an official complaint demanding the publication of an internal EIB examination into alleged tax avoidance and neglect of pollution problems by Swiss commodities giant Glencore Xstrata’s.
  • Other corruption investigations are ongoing for the Sostanj power plant in Slovenia and the Ibori case in Nigeria.
  • The absolute lack of information on beneficial ownership for the EIB’s financing to intermediary institution (especially private equity funds) increases the risk of fraud and leaves the door open for tax dodging.

Quantity vs. Quality

During Hoyer’s hearing in the development committee of the European Parliament, MEPs focused on the volume of the EIB’s lending which is expected to rise significantly within the EU following the bank’s capital increase. But Hoyer emphasised that external lending will remain crucial for the bank and even asked the Parliament to safeguard a sufficient budget.

Rather than concentrating on quantity, we think that the EIB and decision-makers tasked to define its mandate first of all should focus on improving the quality of the loans. In that regard Thijs Berman (S&D) echoed our concerns that “too many project are lacking a clear development orientation” and that the EIB should look for “sound projects which are aimed at poverty eradication”.

Bill Newton Dunn (ALDE) raised the issue of financial intermediaries which are problematic due to their lack of transparency. “You say you keep track of every euro, please tell me your secret”, he asked Hoyer ironically. Dunn explicitly referred to the Ibori case (see above) and wondered how the EIB is addressing issues like fraud and money laundering.

While Hoyer recognised the risks and the need for more efforts to tackle corruption, the EIB has proposed little concrete action apart from awareness raising and trainings for its staff. The revision of its anti-fraud policy which is currently awaiting approval from the board is lacking coherence with other policy initiatives at international level such as the anti-money laundering directive or global initiatives to tackle tax havens.

Filling loopholes

The ELM provides the opportunity to remind the EIB of its development mandate and improve the quality of its lending. A key challenge is indeed to fill the gap between the technical wording of the binding EU legislation and the reality of the EIB’s operations on the ground which are often fraught with opacity.

MEPs like Dunn and Berman pointed out some of the weak spots. Other issues that need to be addressed in the bank’s next mandate are:

  • As the Sostanj case illustrated the EIB needs to find possibilities to freeze disbursements to companies that are under investigation by the EU’s anti-fraud office, OLAF and it should work out how to recover assets when beneficiaries have been found guilty of corruption.
  • In the fight against tax havens, following EU and US legislative initiatives, the EIB should demand country by country reporting from its beneficiaries.
  • More transparency is a classic demand. Above and beyond disclosing more information on beneficial ownership of its intermediated loans, the EIB should also proactively offer much more details on projects on its website.
  • Strengthening public participation in beneficiary countries, by affected communities and civil society at all project levels and information disclosure requirements would also mean a step forward for the bank.

The European Parliament is a key body to hold the EIB to account, and with the ELM it has an important tool at hand to significantly improve the way the bank will operate in the coming 7 years.