Unclaimed Assets chair will borrow to start bank

The chair of the Commission on Unclaimed Assets has said that he will borrow money to kick-start his proposed social investment bank as soon as the Government commits itself to backing the scheme.

Private equity tycoon Sir Ronald Cohen said he would provide money to start the bank in advance of dormant assets being surrendered by banks, building societies and insurance firms.

"The commission feels so strongly that this is a crucial part of the achievement of a successful third sector that we are prepared to take the initiative on this," said Cohen at last week's launch of a report on the proposed bank. "We can raise loan finance in expectation of that money being released."

Steve Evans, branch head of third sector finances at the Treasury, said at the launch that the assets would not be available for use until mid-2009 at the earliest.

Richard Gutch, chief executive of loan fund Futurebuilders, told Third Sector: "The crucial thing would be to make sure the cost of borrowing money doesn't mean the bank has to adopt a position of higher risk.

"As long as you can get that right, and the sooner the bank is started, the better things will be for the sector."

Malcolm Hayday, chief executive of Charity Bank, suggested that, instead of going straight into the bank, assets should be held in an interim fund for use by other sector intermediaries.

"It occurs to us that once Parliament has decided what is going to be done, some of this money should go into a buffer fund so it can be invested by community development financial institutions before being given to the bank," he told Third Sector. "This way, the money can work twice over."

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