New business bank a ‘misnomer’
While the case for the introduction of a British investment bank is compelling, the Chancellor’s planned ‘small business bank’ has been met with scepticism from business leaders. Citi economist Michael Saunders sums it up best, suggesting it had been a “misnomer” to call the Government’s plan a bank, and noting that:
This new ‘business bank’ will not take deposits or raise money in wholesale markets, nor will it have any extra government funding, nor will it take significant new credit risk, and nor will it have any branches…as things stand, we doubt this new plan will add much to other government schemes in terms of improving credit availability”.
Across the world state investment banks play a vital role in spurring on vital investment and supporting innvoation. Instead of more gimmicks, the UK economy needs one too.