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With the Government’s failed economic policies pushing Britain into a double-dip recession, urgent action is needed to create jobs and growth in the economy and to secure longer-term reforms which bring the banking system back into a supportive role for households and businesses.
The document published today explains how Labour’s Policy Review is looking at how to encourage good banking practice, which ensures our banks are more open about what and where they are lending.
To download a copy of the policy review document please click here.
It also explores example of good practice in this area in the United States, where banks have dedicated teams who publish lending data and work with community banks, credit unions, charity banks etc to ensure all areas where they operate have access to financial services.
Knowing where bank lending is happening, and crucially where it is not happening, could help national, regional and local policy-makers better shape support for small and medium-sized businesses, and to tackle poverty and financial exclusion.
It would also give those who want to invest their savings, borrow money and use other banks’ products, information which will better help them make financial decisions.
Stronger joint working between mainstream banks and other parts of the financial services industry such as community banks and credit unions is also required.
Gareth Thomas MP, Labour's Shadow Civil Society Minister, said:
"Consistent disclosure by the banks of anonymised data on what they lend, to whom and where; and stronger incentives to work in all communities including with community ‘banks’ could help banks become more accountable to the communities they serve. Over time it could also help government, banks themselves, community banks and the third sector plug the gaps in the market for access to financial services.
"It is right that a banking sector which has benefitted from around £1 trillion of capital and guarantees provides greater transparency."
Chris Leslie MP, Labour's Shadow Financial Secretary to the Treasury, said:
"Greater openness by the banks isn’t only needed because some neighbourhoods are excluded from access to basic credit; it is essential that all customers have a proper choice of banks who have to work harder to win their business. If there isn’t any competition and one or two banks dominate in a particular area, then small firms and local residents won’t get the affordable and quality banking services they deserve.
"Shining a spotlight into the patterns of banking activities across the country should help shift the balance between banks and consumers."