Prof Richard Werner International Banking academic at Southampton University has a letter in the Financial Times today (24 Feb) . He shows how the lending of the proposed Big Society Bank (BSB) could be at least 15 to 75 times greater than already mooted.
But a Big Society Bank with all the levers back in Whitehall? Not Big Society thinking surely? A key to getting BSB lending out must be more localism in the bank lending process, see Werner's letter: 'council-backed ventures'. Ideas from the German banking model could help, where local council-owned banks feed local needs, with lending decisions made locally. Credit Unions (and not only in Germany), are another solution to localised banking, adding lending competion at the local level. The current UK credit union legislation is a primitive banking model by comparison.
Local banking: Now there's an idea that should boost the UK Coalition Government's Big Society credentials. It would also relieve conventional banks of some 'pressure' as they 'struggle' to help local business at present. A vote winner?
Posted by Charles BazlintonTwitter: @thefreelunch
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