Business bank to back UK SMEs with £10bn
By Anthony Clark
Posted 24 September 2012
A government-backed bank that aims to offer £10bn to UK businesses has been unveiled by Business Secretary Vince Cable.
The aim is to address a “long-standing, structural gaps in the supply of finance”, he explained. According to Cable, the bank will bring together government support for small and mid-sized businesses and will also control the government’s interests in a new wholesale funding mechanism, which will be developed to “unlock institutional investment to benefit small businesses”.
“For decades British industry has lacked the sort of diverse, long-term finance that is quite normal elsewhere. We need a British business bank with a clean balance sheet and a mandate to expand lending rapidly and we are now going to get it,” said Cable.
“Alongside the private sector, the bank will get the market lending to manufacturers, exporters and growth companies that so desperately need support. It will be a lasting monument to our determination to reshape finance so it can finally serve industry the way it should. Its success will not be the scale of its own direct interventions but how far it shakes up the market in business finance and helps to ease constraints for high-growth firms.
The bank, which will operate at arms-length from Government, will facilitate the provision of loans, including long-term capital, to UK firms through banks and other financial institutions, said Cable.
By harnessing the power of capital markets, it has the potential to transform business finance in the UK, he added
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