Mr. Aidan Carrigan:

That is a valid position to take given our current knowledge of what the proposal entails. SMEs in Europe are generally far larger organisations than SMEs in Ireland. I have debated this with my colleagues at European Council meetings and we are not alone in being a smaller country with an economy heavily reliant on smaller enterprises so there is a shared concern among a wide range of members. We will bring our wish to see benefits to the table. However, there are already benefits inherent in the proposal. First, the proposal on securitisation creates stronger financial institutions and provides a wider base of sources of finance for financial institutions. It allows them capital reliefs from removing moneys off their books and frees up further moneys. The banks then look for markets for lend to and might begin to be more favourably disposed towards lending to SMEs than before. There are indirect benefits.

CMU talks about the need to standardise and improve credit information quality. We have already gone some way in the development of our credit registry, which will commence next year under the Central Bank. That kind of development around Europe better positions SMEs to access credit from financial institutions. Part of the problem has been the quality of information the SME can bring to the financial institution.

I spoke about crowd funding in my opening statement. Crowd funding has the potential to focus on smaller enterprises. It will not be on a huge scale but it could be very beneficial to start-up companies and new ideas. We need to see this area develop. Of course, there are regulatory concerns and consumer protection issues around that and we will work closely with the Central Bank in looking at that but part of this process must draw attention to all these other issues such as mini bonds and crowd funding. Within the Department of Finance and as part of this project, we will examine the potential of those in an Irish context to support SME finance.