The British Chambers of Commerce has published a paper setting out a case for the establishment of a state-backed British Business Bank.
The British Chambers of Commerce (BCC) has published a paper setting out a case for the establishment of a state-backed business bank.
The BCC’s long-standing call for such an institution received a boost when both Chancellor George Osborne and business secretary Vince Cable announced that their departments were considering the creation of a new bank to improve the flow of credit to small and medium-sized businesses.
The BCC paper, entitled 'The case for a British Business Bank', says that a new state-backed business bank would be a clear ‘first port of call’ for all viable companies seeking growth finance.
It is intended that the bank would complement existing banks and other lenders, with an emphasis on helping 'dynamic and fast-growing companies' which report difficulty accessing finance, as well as address discouraged demand among some existing bank customers.
Additional proposals include the bank having its own infrastructure to 'rigorously assess risk and return, rather than depend on the increasingly risk-averse culture of commercial banks'.
The BCC’s paper also notes that the state-backed bank could help companies seeking mezzanine, export or supply-chain finance support, which is said to be key to rebalancing the economy in the years to come.
Dr Adam Marshall, BCC director of policy and external affairs says that his organisation has repeatedly urged ministers to take the step to establish a business bank, which could help kick-start growth and jobs in the UK for decades to come.
He adds, 'A business bank isn’t the answer to economic stagnation in the short term, and the government must be careful to get the setup right the first time. But a business bank would be able to help prevent a repeat of the financing difficulties faced by many companies since the credit crunch.
'What’s more, a business bank could help many new and fast-growing companies become the UK’s future champions.'
See also: Opening a business bank account