No money, no moonshot – how bold moves could be financed

Inventions change people’s lives. From steamships and the first powered flight to the discovery of x-rays or life-saving vaccines – breakthroughs of this kind are always the result of a courageous idea and the grit to see it through There is a need to accelerate the sustainability and digitalisation transitions, especially in view of the current climate emergency – the question, though, is how to finance it. Different regions stand to learn from each other. We talked about the question of financing these bold moves with three experts from Deutsche Bank, each with their own unique take.

Three experts, three ideas, three concepts

Henrik Johnsson believes that having uniform capital markets across Europe would help. "Europe needs bold moves in order to compete with the other global regions," says Johnsson, the Investment Bank's Co-Head of the Europe, Middle East and Africa region. "And in order to finance those bold moves we need to break down barriers." Here, Johnsson points to the US, with its highly developed capital market. "Europe, on the other hand, is completely fragmented into different countries and different exchanges," he says. "And that makes it much harder for companies to raise capital from a diverse pool of investors."

That makes it much harder for companies to raise capital from a diverse pool of investors.
Henrik Johnsson, Investment Bank's Co-Head of the Europe, Middle East and Africa region at Deutsche Bank

Sandra Primiero, who works in Trade Finance, approaches the problem from the other side: she argues that public-private partnerships (PPPs) would be a way for countries to guarantee loans for certain strategic projects in the private sector.

"Building green hydrogen infrastructure, for example, requires huge sums of money," Primiero says. "Anyone who finances such projects needs to be confident that the government of the respective country is fully behind it." If governments participate with guarantees or their own funds, that can provide the necessary confidence, she says.

Security tokens could be a cheap way (…) to attract investors from all over the world
Stefan Teis, Product Management Blockchain/DLT, Digital Assets and Currencies at Deutsche Bank

Stefan Teis describes a completely different idea. The blockchain expert sees it as a possibility that companies will issue security tokens in the future, which represent a share in the company:

"Small companies with risky ideas can't issue shares," Teis says. "Security tokens could be a cheap way for them to attract investors from all over the world."

Here, however, he argues regulation needs to get much better to protect investors' rights. "That's essential from my point of view," Teis says, "because that's the only way to create the trust it takes for investors to invest in small, truly bold companies over the long term."