Airdrie Savings Bank closes its doors at the same time as closure of Clydesdale and Yorkshire Bank local branches
SCOTLAND’S last independent savings bank has closed its doors, prompting a Scottish think tank to call for the creation of new People’s Banks to provide socially useful aid to struggling businesses.
The Common Weal group made the call for the new type of local and accountable finance following the announcement of the closure of Airdrie Savings Bank, which has been in service since 1835, operating a local independent service, with some of its board working in voluntary roles.
Clydesdale and Yorkshire Bank have also announced the closure of 79 branches with the loss of 400 jobs, representing another major diminution for high street banking in the UK – against the backdrop of a swelling financial sector designed to service major corporate interests.
Speaking to CommonSpace, head of policy for Common Weal, said: “This is a symbolic moment in the history of Scottish and UK banking. The closure of Airdrie Savings Bank is the end of independent banking run on mutual principles and the final victory for the corporate giants.
“70% of small business lending in Scotland is dominated by just two banks, RBS and Lloyds. Most small businesses in Scotland say the problem isn’t accessing loans, the problem is the terms and conditions big banks put on those loans.
Wray said the alternative could be found in banks that trade in ethical and community based long-term low-interest loans. This should be a priority for Scotland, he argued, ahead of the Scottish local elections in May.
He said: “The answer is to establish People’s Banks. This would be local authority based savings banks that would give the public the option of putting their money into something they know would go back into the community, providing low-cost and long-term loans to socially and environmentally useful investment opportunities.
“With the council elections coming up, this is something political parties in Scotland must look at – the alternative is ever greater concentration and centralisation of Scottish banking around big banks that have little interest in local, productive investment and are inherently unstable.”
Common Weal produced a report alongside the New Economics Foundation, Friends of the Earth Scotland and Move Your Money on the possibility of such banks in a report titled ‘Banking for the Common Good’.
The report found that 6.5 per cent of the Scottish Government’s capital budget could by invested in a Scottish National Investment bank, which would leverage £3.4bn for investment in small business and other social enterprises, and that this structure could be used to support local banking.
When the over-centralised financial banking system collapsed in 2008, it helped to undermine the world economic system and cost the UK economy a total of £7,400bn.
Picture courtesy of tom_bullock
Check out what people are saying about how important CommonSpace is. Pledge your support today.