Productive Finance Working Group

What is the Productive Finance Working Group?

The industry-led Productive Finance Working Group aims to develop practical solutions to the barriers to investing in long-term, less liquid assets. The Group was convened in November 2020 by the Bank of England, HM Treasury and the Financial Conduct Authority.

Low interest rates and relatively slow economic growth, by historic standards, have increased the challenge for savers in terms of returns on their investments. One way to achieve higher returns, net of cost, is to invest in longer-term, less liquid assets, managed appropriately.

Investment in such assets, including productive finance assets, could also benefit the wider economy. It can support economic recovery, financial stability and the transition to net zero. Examples of productive assets include research and development, technology, and infrastructure.

• News release to convene Working Group to facilitate investment in productive finance

Report

In September 2021, the Working Group has published a report including recommendations that will create an environment in which defined contribution (DC) schemes and other investors can benefit from the appropriate long-term opportunities. These recommendations fall into four categories, requiring action from both industry and official sector:

1. Shifting the focus to long-term value for DC pension scheme members 
2. Building scale in the DC market
3. A new approach to liquidity management
4. Widening access to less liquid assets

• News release and Working Group member statements: Productive finance working group publishes recommendations addressing the barriers to investment in less liquid assets
• Report: A roadmap for increasing productive finance investment

Working Group information

In May 2021, John Glen, Andrew Bailey and Nikhil Rathi, the co-chairs of the Working Group, gave an interim update on its progress.

• Statement on the progress of the Working Group on Productive Finance

You can download the Working Group’s terms of reference, membership criteria, and membership list below.

• Terms of reference (pdf 0.3MB)
• Membership criteria (pdf 0.1MB)
• Membership list (pdf 0.3MB)

Contact

To contact the Working Group, please email its Secretariat at FSSR-Productive-Finance-Secretariat@bankofengland.co.uk and ProductiveFinanceWG@fca.org.uk.