New Bank Comes to Economic Rescue

Plans have recently been unveiled by Birmingham City Council in the UK, to create a municipal bank that could help local residents through the current economic downturn. Birmingham has a long tradition of innovation, with a council-run bank originally being set up in 1916, by Lord Mayor Neville Chamberlain, to help the city recover after the war. The Bank of Birmingham will offer loans to businesses and other potential investors in the city, while investigating ways to stabilise the local mortgage market.

Speaking at a Birmingham Prospectus Briefing, Counsellor Mike Whitby said: ‘We once ran a municipal bank and so, given the recent market failings, I think the time might be right for us to do so again. The current credit crunch has put intolerable pressure on many small, yet sound businesses ñ people trying to get on the property ladder and those who are seeking to invest in the city.’ Under the proposed plans, Birmingham City Council, the UK’s largest local authority, is planning to lend up to £200 million to small businesses.

Similar plans have been announced by Essex County Council, following com-plaints from local businesses that high street banks were refusing to give credit amid the financial crisis. The plan is to create a £50 million community bank, pooling funds from the local police and health authorities, as well as from the Council. An Essex Post Office initiative is also under way, subsidising branches threatened with closure.

Contact: Birmingham County Council,
Council House,Victoria Square, Birmingham, B1 1BB
Tel: +44 (0)121 303 1111

Image: Councillor Mike Whitby
Photo: © Birmingham City Council

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