and leasing are the two largest sources of funds. 4 recognising the challenges faced by the sme sector, the central bank has issued regulations that aim to strengthen protections while also facilitating access to credit, by introducing specific requirements that regulated lenders must comply with. 5 the provision of credit to smes in ireland was undoubtedly severely affected by the financial crisis. default rates remain elevated, the most recent sme market report shows default rates across all sectors are on average 22. 6 %. 6 the total credit outstanding to non - financial, non - real estate smes stands at €16. 2 billion in q1 2018. 7 today, the provision of bank credit to smes in 1 / 3 bis central bankers'speeches ireland is very concentrated. three banks had an 87 % market share of all new sme loans issued in the first quarter, 2018. 8 this concentration, together with the higher historic levels of default in irish sme lending are contributory factors in interest rates for irish smes being higher than average interest rates for smes operating in other countries in the eurozone. 9 nonetheless, there have been improvements in the provision of irish sme credit in recent years. annualised new bank lending to non - financial, non - real - estate smes has risen from €2bn in late 2013 to €3. 75bn as of the first quarter of this year. 10 this recovery has been broad - based across industrial sectors, but two sectors are predominant : the agricultural and wholesale, retail trade and repairs sectors account for 42 % of the new bank lending. 11 overall, as reported in the department of finance sme credit demand survey, the credit market has shown a reduction in the application rate for bank financing from march 2012 to march 2017 but has since stabilised and increased moderately in the period to march 2018. 12 demand for financing is most common among medium size firms and lowest among micro sized firms ( those with less than 10 employees ). the rejection rates shows a steady decline from march 2012 to march 2016 and have stabilised in 2017 and 2018. the survey also shows micro firms experience significantly higher rejection rates than other sme types. 13 the range of funding available to the sme sector has expanded in recent years. the establishment of the strategic banking corporation of ireland ( sbci ) has provided a further source of funding to irish smes. total sbci loans drawn down from inception to end - march 2018 stood at €952 million. 14 a range of

recent summary of the issues and literature is in mckay and wolf [ 14 ] gabriel makhlouf ( 2022 ), “ rebuilding social capital : the role of central banks ”, speech delivered at the 175th anniversary of banco de portugal. [ 15 ] the escb consists of the ecb and the national central banks of all eu member states, regardless of whether they are a member of the euro or not. the ‘ eurosystem ’ is made up of the ecb and 20 national central banks that are in the euro area. european commission ( 2022 ), communication on orientations for a reform of the eu economic governance framework, 9 november. [ 16 ] european commission ( 2022 ), communication on orientations for a reform of the eu economic governance framework, 9 november. [ 17 ] as mersch ( 2019 ) explains, “ proportionality is one of the basic legal principles of the architecture of the european union. for monetary policy, proportionality implies that the ecb ’ s actions must, first, be suitable to address the identified risks to price stability. second, the ecb ’ s measures must be necessary to achieve their intended objective. in other words, alternative monetary policy measures that entail more limited action would not enable the objective to be achieved as effectively and rapidly. third, proportionality stricto sensu implies that the expected benefits of the ecb ’ s actions must outweigh their costs. ” [ 18 ] kenneth rogoff ( 2019 ), “ is this the beginning of the end of central bank independence? ” occasional paper, no. 95, group of thirty. [ 19 ] for more on this programme, the research and findings see the programme website. [ 20 ] the review is published on the bbc website. the audience research report is available here. [ 21 ] see rodolfo dall ’ orto mas, benjamin vonessen, christian fehlker, and katrin arnold ( 2020 ), “ the case for central bank independence ”, ecb occasional paper series n. 248. [ 22 ] raghuram g. rajan ( 2019 ), central banks are the fall guys, project syndicate commentary, july. [ 23 ] see rustam jamilov, social capital and monetary policy ( 2022 ), “ social capital and monetary policy ” jamilov argues that secular decline in trust in the us over the past three decades has led to monetary policy being 20 per cent less effective. [ 24 ]