Mr. Nick Ashmore:

In terms of the vision we have for the SBCI, it is to be a strong promotional financial institution within the Irish market that will have a major impact over the long term, a very effective conduit and support for channelling European resources, for example, the EIB banking group, into the market here and a real contributor. With the added impetus, engagement and presence of the EIB in the market here, combined with SBCI's enabling platform and construction of infrastructure - in terms of channels to market and systems to deal with those channels to market - there is a lot more that we can do over time as we grow this. The market failures we are addressing will evolve over time. For example, quantitative easing has had a relative impact on how attractive our liquidity is - certainly to banks, which can fund more cheaply. The EIB has been known to lend directly into banks in a similar way and that, again, is not happening at the moment because the markets are flooded with liquidity. We will see different things come and go. In essence, the SBCI needs to be counter-cyclical. It needs to not ramp up its activity at a time when things are really taking off in terms of credit because we could reinforce a bubble if we were not careful. It is not something we see as a risk at the moment but it is something we are very cognisant of. We see significant potential to grow but at the same time, we do not want to be the market. We have seen how in other countries, the promotional institution has become the market for SMEs and almost the entire market is effectively state supported. That is at the extreme end of the spectrum and happened over a long time but it is not somewhere we want to get to. We really want to support a strongly functioning market.

In terms of what we need to unlock to let it grow, the SBCI is fortunate in that all the legislation we need to be able to do what we do going down the line has been passed. A key factor for us is to identify the right things to do and get the strong stakeholder support both in terms of the explicit authority from the Departments and any resources they provide, to source support from the EIB, which has been another provider of funding and support, and to deliver a mechanism that works in the market. Those things take time. We were able to get the agriculture cashflow support loan scheme into the market very quickly but that is only because the team and stakeholders put in about 18 months of work in advance to prepare for that situation. We did not know what measure would come down the line that would be the first case but we were ready for it. We had built a lot of capability. We are certainly building our capability within the organisation without taking on too many resources and creating too excessive a cost base.

In a similar way to the EIB, we are looking for cases. We are looking for the right places to deploy the support we can provide. We are also doing a lot of research around what the art of the possible is. We are members of two main networks within Europe - the Network of European Financial Institutions for SMEs, NEFI, and the European Long Term Investors Association. They are networks of peer national promotional institutions. We learn a huge amount of them as to how they operate in their countries - be they Bank Gospodarstwa Krajowego, BGK, in Poland, Instituto de Crédito Oficial, ICO, in Spain or Cassa Depositi e Prestiti, CDP, in Italy, which are really ramping up their activities at present. We are hosting the next NEFI working group in Dublin this month. They are very valuable sources of information and expertise. There is no clear answer.