I.O.U.K.

Our banks have ceased to fulfil their original function. Once they thrived on the business of ordinary people and businesses; now they are so big and remote that that basic service is a sideline. They have neglected and undermined the small shops and local enterprises that create most jobs and help provide the social glue that holds communities together. And it’s set to get worse. Branches are still closing; those that remain have no local managers and deal with loan applications on the basis of abstract national and regional formulae. The shift in the shape and business model of banks over the last generation has not just precipitated the present financial crisis but has rendered banks ‘unfit for purpose’.

Yet a financial system that is fit for purpose can be created by returning the banks to scale, investing in communities and supporting small businesses. Now is the opportunity. The sleeping architecture for a new, resilient economy exists. I.O.U.K. makes the case for a radically different approach to banking. It argues for smaller, more specialised and localised banks, which are transparent about their patterns of lending. Financial inclusion must be prioritised, the Post Office should be the home of a new, publicly-owned People's Bank, and small businesses, the bedrock of the UK economy, should be supported both financially and within legislation.