News has emerged that the UK’s Financial Services Authority plans to review the current requirements for a banking licence to ensure they are proportionate and do not create overly onerous barriers to entry. As part of this process it will review any applications for banking licences that have been unsuccessful. Given that only one new bank – Metro Bank in 2010 – has been granted a high street banking licence in the past 100 years, they might have their work cut out.
So if you fancy setting up a bank, now is your chance. One UK resident that did is Burnley-based minibus salesman Dave Fishwick. The subject of a recent TV documentary, Dave planned to set up a bank that would offer a 5% return on savings, lend to local businesses and give any profits to charity. This kind of dangerous thinking is unrecognizable in the banking industry and the FSA declined to give him a licence.
The little man prevailed, however, attracting support from Tony Blair’s former PR guru, Alastair Campbell, and the coalition government’s business secretary, Vince Cable. ‘Bank on Dave’ got around its lack of a licence to generate a profit of £9,500 from lending to local businesses – all donated to local charities. Although turning banks into not-for-profit organizations might be a step too far for even Vince Cable, there is little dispute that a rethink of how the sector operates is needed. And with the failure of Project Merlin and the lukewarm response to the Bank of England’s funding for lending initiative, maybe Dave is the face of banking’s future.