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Perhaps the risk is the opposite, that rather than crowding out private funding, BBB is allowing banks to reduce the amount of risk they take with corporate lending, because an other bank will use guarantees such as the Growth Guarantee Scheme. Advisors tell me that the issue is that banks increasingly rely on BBB to underwrite corporate lending moving risk from the private to the public balance sheet (in part).

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It would be interesting (or rather not) to compare with other similar schemes across European countries or even more centrally with EIF and EIC money.

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This is a very good point - after all, most EU countries (and the EIF) have equity investment programmes so if the UK is operating on outdated assumptions then perhaps they are too...

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I'd have loved to go into this, but the time and word count would have become crushing. Some quick thoughts:

i) the UK venture scene is significantly more mature than its European counterparts. UK VCs have raised more than their French and German counterparts combined, so there's a case to be made (although I'm not sure I entirely agree with it) that there's stronger grounds for government involvement to kickstart the ecosystem

ii) based on the (admittedly hard to find) returns stats for a lot of European funds - they're often not a great advert for the effectiveness of government intervention. The stats I from the mid-noughties about government funding crowding out more disciplined private investors comes from a study of European VC govt support schemes that found European funds in that era on average had negative(!) returns.

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