Birmingham Joins Essex In Creating Its Own Bank Now That All The Others Don’t Give Out Money Any More
Last week we looked at how Essex council was opening its own bank to help out businesses hurt by the credit crunch and unable to get loans from high street banks, and now Birmingham is doing the same. It’s going to be called the Bank of Birmingham, or Bob for short. Cute!
The West Midlands’ regional development agency has been swamped with requests for its emergency loans, so they’ve gone the whole hog and made a bank for everyone. Actually more than that whole hog (whatever that is) – they’re also going to take retail deposits, ie money from regular Brummies. Lending of “£100m to £200m was not impossible”, said Stephen Hughes, chief executive of the council.
They’re not just planning to make traditional loans however. Funding could take the form of providing premises and capital for local businesses, with the assets used by the council to increase borrowing. They’re also mooting a mortgage service for homebuyers. The proposals join Birmingham’s “little stock market that could”, Invest BX, which is adorably small with just two companies trading. Aww! It’s designed to jump-start liquidity for small and medium-sized businesses in the region, it remains to be seen how favourable its terms will be in the current climate. I’d go with Bob for the time being to be honest.
It’s a blast from the past for Brum, who used to have a municipal bank from 1916 til 1979, created by Neville Chamberlain. Isn’t it odd how this financial crisis has us all scrabbling back to these nice cosy parts of socialism? Anyway, ta-ra a bit for now!