There was no shortage of private sector capital to support investment in infrastructure and few reasons to support the sector with an infrastructure bank, the Productivity Commission said in a report released on Wednesday.There were US$25 billion of project bonds placed in global markets in 2012, almost double the level in 2011.  Bank project loans were US$289 billion in 2012, with substitution between loans and bonds.The commission said there was evidence financial markets were recovering from the GFC, with the corporate bond market showing "strong signs of recovery.""Despite the continued reliance on bank loans in Australia," the commission said it endorsed the view expressed by the Office of the Infrastructure Coordinator "that banks are considered to be pricing greenfields risk appropriately and equity investors are willing to take on and price refinancing risk arising from the provision of short-term bank loans."The commission found that, "following a dip during the GFC, lending by banks to non-financial corporations returned to pre-GFC levels, and Australian firms continue to access debt and equity finance in domestic and offshore markets, although finance may be more expensive than was the case prior to the GFC.""Similarly, there is generally a sufficient appetite from both the equity and debt markets to finance commercially-sound public infrastructure at a reasonable rate of return reflecting the risk in the project, provided there is a funding stream available to support the finance," the Commission said."The lack of private sector appetite to finance public infrastructure projects appears to be mainly driven by reluctance to take on greenfields patronage risk," which the commission said "can be overcome by governments providing a commensurate funding stream through availability payment models.""Overall, there appears to be no shortage of private sector capital that could potentially be deployed to finance public infrastructure in Australia for commercially-sound projects. "While the repricing of risk may have changed the composition of finance in recent years, there are still significant levels of private sector investment occurring in Australia and overseas."On calls for a public infrastructure bank, the commission said it could see risks associated with government ownership of a bank."Since the 1990s, the financial system in Australia has largely moved away from government ownership of financial institutions, in some cases prompted by the financial mismanagement and/or collapse of institutions, such as the State Banks of South Australia and Victoria," it said. "Over the years, various attempts by the Australian and State Governments at operating publicly funded economic development operations have also ended in failure. International research indicates that government ownership of financial institutions is associated with slower subsequent financial development and lower growth of productivity."The Commission said there was a risk the establishment of an infrastructure bank would  create pressure to fund projects that would otherwise not pass a cost-benefit assessment, simply because there was capital available at any given time. "Role creep has occurred in the context of a number of apparently specialist institutions," and the commission said it had "previously observed this outcome in the context of Australia's export credit arrangements. In