A Public Investment Bank would have a mandate to lead the way in addressing the current and future economic crisis. The bank would be accountable to the public and not to shareholders, and it would not be charged with short-term profit maximization. A high profit margin during times of national need would signal a bank that is not fulfilling its purpose. Moreover, the requirement to meet long-term break-even criteria would help discipline the bank’s decision-making.
A Public Investment Bank is an institution that provides loans to companies in the public interest. Its mandate is often broad, but it may also be narrow. The most successful Public Investment Banks are those with broader mandates and the flexibility to respond to changing priorities. These banks typically focus on missions that align with government policy. They are more likely to be successful if they provide a broad range of financing and support a broader range of economic activities.
Public investment banks are often multilateral and national institutions, and unlike private sector institutions, they are not under pressure to provide short-term returns. Instead, they can focus on achieving long-term goals, such as increasing the population’s standard of living. Furthermore, public investment banks often place a higher priority on social goals, and their reward systems are different from those of the private sector. Although they have traditionally focused on infrastructure and project finance, these institutions have also taken on more mission-oriented roles.