Britain's vote to leave the European Union (EU) could significantly reduce the relevance of the European Investment Bank (EIB), an analyst told CNBC.
The EIB, a lender owned by EU member states, is particularly vulnerable to Brexit as the U.K. is one of its key investors and any such divorce from the EU would likely cause a major headache for governments across the continent.
"(Brexit) reduces the EIB's firepower, the bank is in danger of becoming a less relevant institution and its credibility is in question," Chris Beauchamp, chief market analyst with IG, said on Friday.
"Of course, the result of Italy's referendum could make things a whole lot worse too…" he added.
Italy's referendum on December 4 has put Euro zone fears back on the table as the country is expected to reject the proposed constitutional reforms.
The EIB's total capital amounts to around 243 billion euros ($257 billion dollars) according to Reuters, though just 21 billion euros of this is paid in. Britain's share of the amount paid-in is approximately 3.4 billion euros or close to 16 percent.
Only EU member states are able to pay in to the EIB which would rule out the U.K. once Brexit has been completed. However, it is technically possible for a transitional deal, or even a change to the ruling altogether to be successfully negotiated in that time.
One potential problem for EU governments is that once the U.K. departs from the EU and therefore withdraws from the EIB, other EU member states would then need to increase their shares accordingly to plug the gap for the bank to maintain its lending capacity.
"That would be the ideal solution," said Beauchamp.
"But, it is not that easy as there are bigger questions here. Does everyone bump up accordingly or will this fall on the stronger economies? Greece, Italy and Eastern European countries would likely look to Germany to shoulder the burden which, if Germany agreed, could then be used as a political tool," he added.
Werner Hoyer, president of the EIB told reporters in Slovakia in September that the bank and the continent would have to wait and see how negotiations go before anything can be confirmed.
"We will have a few years of uncertainty ahead of us during which it won't be clear what will happen to Great Britain and its relation with the European Union. And depending on this is of course the question of what the relation between Britain and the European Investment Bank will be," Hoyer said.