Mr. Frank O'Dwyer:

I think care needs to be taken not to assume that a stated objective of an EU initiative to help SMEs, means that an extremely large pool of Irish business is going to directly benefit. I think such an assumption would be a mistake. It is an issue of scale. If we loosely define the "S" part of SME in the larger economies of maybe, of market capitalisation of say, €20 million or €25 million, at the top end, to be €200 million, that rules out a direct value to large chunks of the real economy in Ireland. However, I mentioned innovative approaches. One is an indirect benefit to the extent that there is an ability of banks to pool portfolios of loans and then that there are investors able to take those securitised products and leave yet more head room for the banks to lend within their capital bases. That is an indirect benefit.

There are ways of being innovative. Large institutional investors in Europe possibly considering a play on the Irish economy might look at a pool of loans that are with the acknowledged leading edge end of Enterprise Ireland's food and agri-sector companies or maybe the technology or the fin-tech side or life sciences. If they have some way of pooling together the best of what we have I could conceive of people being interested. It would not be directly going to a life sciences company that needs a couple of million euro but maybe in some form of aggregation. People would take an interest in it because they would say, touch wood, that these sectors in Ireland are well done, well managed, outward looking and that there is upside there. In that sense I think we need to be smart about how we think about it as directly impacting in terms of medium and long term funding into what we in Ireland call SMEs.

A good example is a session organised by the Department of Finance at the Stock Exchange a number of months ago about the concept of mini bonds. There are mini bond markets in Germany and UK. Market participants and investments made the point that the minimum cost to a company to get together a bond prospectus and some form of specialist investor rating is probably €250,000 including legal fees, tax fees and accounting fees. That means the minimum ticket size of the bond issue is between €8 million and €10 million. The number of companies in Ireland that cannot access bank finance and for which a bond issue of between €8 million and €10 million solves the problem is small. In that context, we must examine the matter.