Comment: Time for Cable to reveal his plans for new bank
THE proposed Business Bank is regarded as one of the coalition’s flagship initiatives and today we should learn more about how it could help kickstart the recovery.
Business Secretary Vince Cable has been a keen advocate of a taxpayer-funded institution able to leverage up to £10 billion of private money that will flow directly into smaller businesses.
The Lib-Dems see it as an answer to Britain’s broken banking system, though they were forced to fight hard to persuade Chancellor George Osborne of the need for it. There was some disappointment when few details emerged in the Autumn Statement but Cable should tell us more in a ministerial announcement today.
So what will his new brainchild do with its initial £1bn budget? Cable wants to model it on the German KfW development bank which has its roots in the post-war Marshall Plan for the country’s recovery. Over the past 60 years, it has provided more than €1 trillion in loans to small firms and to help build infrastructure.
There has been concern that the British version would act as little more than a clearing house for various government initiatives, but it is likely to be more pro-active than that; it is expected to promote innovative schemes such as peer-to-peer lending where individuals and companies lend to each other.
Cable has enlisted the help of former Bank of Scotland governor Sir Peter Burt who will work as an adviser. He is regarded as old school and presumably representative of the boring banker generation before excess tainted the profession. He did, however, lose out to Royal Bank of Scotland in a bidding war for NatWest, so he was not that boring nor risk-averse.
Co-op is banking on Sutherland to deliver
the appointment of Kingfisher chief operating officer Euan Sutherland to succeed Peter Marks as chief executive of Co-operative Group has unnerved those who were expecting someone with a financial services background.
Despite the Co-op having a core retail function, the group is taking on the daunting challenge of hugely expanding its banking operations following the acquisition of assets from Lloyds. It is no easy task, given its problems integrating Britannia Building Society, Marks’ early doubts about whether the deal with Lloyds would go through, and Santander’s withdrawal from buying Royal Bank of Scotland branches over IT difficulties.
Sutherland, a Scot with a track record in the fast-moving consumer goods sector, is largely unknown in his home territory. His new job will give him control over 632 branches of Lloyds TSB, including 185 in Scotland, and the Cheltenham & Gloucester mortgage business. It is a chunky operation with 4.8 million UK customers and a 7 per cent share of the current account market.
Sutherland is credited with rebuilding Kingfisher, owner of B&Q, over five years. He’s likely to need at least that time to integrate his new banking assets.
Another fines mess for global financial sector
after a year of financial scandals, it is appropriate that it ends with the two biggest fines ever imposed on the banks.
HSBC and UBS will pay out £2bn between them to settle claims respectively of money laundering and rate-rigging. Surely in 2013 things can only get better?
Search for a job
Search for a car
Search for a house
Weather for Edinburgh
Monday 20 May 2013
Temperature: 8 C to 21 C
Wind Speed: 8 mph
Wind direction: North west
Temperature: 7 C to 17 C
Wind Speed: 10 mph
Wind direction: North west