In the latest stage of development of the so-called Big Society Bank to support social ventures, the UK’s Cabinet Office has approved proposals for the bank drawn up by Sir Ronald Cohen, one of the prime movers of the initiative, and Nick O’Donohoe, formerly with J P Morgan. Francis Maude, Minister for the Cabinet Office, said he would back their proposals, subject to some contingencies: further development work, agreement from the four high street banks that will provide £200 million of initial capital, and approvals from the Financial Services Authority and the European Commission, which must agree that the bank does not break its rules on state aid.
The bank will receive unclaimed assets money over the next five years and money from high street banks over the next two, the proposal says, although the precise terms on which the banks will provide the money are still under debate. According to the proposal, however, it is likely to be ‘long-term permanent capital’. The Cabinet Office has confirmed that a reclaim fund to channel money from unclaimed assets into the bank has already been set up and says the first money is likely to be available to lend later this year.