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Business Bank bosses named
The Government has announced senior appointments to its Business Bank and predicted that the venture will unlock up to £10 billion of finance for small and medium-sized firms.
Ron Emerson will chair the bank and Christina McComb will be senior independent director.
Mr Emerson has spent most of his career in international banking.
Business Secretary Vince Cable said: "This is an important milestone in the establishment of the British Business Bank.
"The UK is coming out of the worst recession since the 1930s, with a badly-damaged banking system.
"Helping businesses to access the funds they need to grow is key to our recovery."
The bank will be fully operational next year.
Mr Cable said the bank will work closely with the markets and help to unlock £10 billion of finance over the next five years.
Around 60 people are currently working on the venture, rising to 100 once European Union state aid approval is received in a year's time.
The bank will be marketed as "unlocking finance for smaller businesses" and will operate out of London and Sheffield, with no traditional high street branches.
John Longworth, director general of the British Chambers of Commerce said: "Businesses will be pleased to see the first appointments made to the senior British Business Bank team, as this provides certainty to businesses that the Bank will become a reality in the autumn of 2014.
"However under the current plans the Bank will lack the scale necessary to play a full role in providing access to finance to viable businesses. We continue to call for the Bank to be better capitalised and have the ability to lend directly to businesses, so that they can access the same level of financial support that companies in other countries take for granted. Otherwise we run the risk of a Business Bank that is irrelevant before it starts."
John Allan, chairman of the Federation of Small Businesses, said: "We hope the Business Bank can look at ways to strengthen the financial offering for the smallest firms, through both traditional and alternative finance methods."
Mr Longworth claimed "City boys" in the Treasury were to blame for blocking the plans to beef up the business bank.
Ministers have committed £1 billion in new money to it but business groups say its level of investment capital must be much bigger.
Mr Longworth told the British Bankers' Association conference: "The Business Department, Vince Cable, is definitely supportive of creating a more beefy business bank. The officials in the Treasury are opposed to it."
He said Bank of England governor Mark Carney was in favour of the business bank but there was no appetite for the Bank to back it.
However Mr Longworth said it would be better spent than the billions put behind the Funding for Lending scheme to boost borrowing for small businesses and households.