Arising out of the capital markets and long-term financing of developing Irish enterprise study carried out by Peter Bacon and Associates at the end of 1996, an evaluation of the merits of introducing, inter alia, a mutual loan guarantee scheme for SMEs was undertaken. This evaluation was conducted by officials from Forfás, Forbairt and my own Department during 1997 and included an analysis of mutual loan guarantee schemes in other European countries. The group found no discernible market appetite for a mutual guarantee scheme nor did it consider that there was sufficient evidence of failure in the SME credit market here as to justify the introduction of such a scheme. The evaluation did not rule out consideration of such a scheme, should a retrenchment in bank lending emerge in the future.