British firms plan to set up a new bank

I was musing the other day that just as, if you had some spare capital kicking around, now would be a good time to buy property, if you were seriously rich it would also be a good time to set up a bank. While the rest of the banks are in crisis and too scared of their own shadows to lend money, a new bank could, at least for a while, be the only show in town.

Well it seems that some other people have had the same idea. According to the Independent, six UK listed companies are behind a plan to set up a new bank. The new company would lend to corporate clients. A ‘City source’ told the Indie:

These guys are totally fed up with the problems with the inertia, so are looking to get together and create an institution that can lend to small and medium-sized firms. Given that most banks have horribly messy balance sheets, they figure it’s easier to start from scratch.

Capitalism has, somewhat unfairly, taken a bit of a knock over the past year or so. This is a good example of why, for all its faults, it still works. The existing players have screwed up so a new entrant comes along to snaffle some of their markets.

Let’s hope this new bank gets of the ground and starts providing capital for businesses sometime soon.

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5 Responses to British firms plan to set up a new bank

  1. hpx83 says:

    Interesting news…the speed at which new, healthy banks popped up would rocket if any government actually let a bank fail now and then …..

    How many times GDP will Britain spend before giving up on the horrible crap-piles that used to be “banks”?

    Save capitalism

  2. Rick says:

    The US let Lehmans fail and look what happened.

  3. hpx83 says:

    The mess wasn’t due to the failure of Lehman – Lehman was merely the trigger. We would have been in this mess regardless. However – if corrupt, worthless institutions were allowed to fail than maybe there’d be a chance of something new growing out of the ashes of the old. This world is in need of a cleansing from government corruption of values, private sector nepotism and overall lack of ideals.

  4. Ah-huh.

    I think I agree more with your comment on 19th,
    “..when we do finally surface from the deep recession, perhaps we should apply our famous British ingenuity and inventiveness to something other than banking.”

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