UK business secretary Vince Cable announces creation of new business bank

UK business secretary Vince Cable today announced the creation of a business bank that would lend up to £10 billion to small and medium sized businesses.

He told a Liberal Democrat party conference in Brighton that the bank, which would be up and running in 18 months, would "get behind" good businesses.

The government would put up £1 billion and hoped this would be matched by private sector investment.

"We need a new British Business Bank with a clean balance sheet and an ability to expand lending rapidly to the manufacturers, exporters and high-growth companies that power our economy," he said.

"Today, I can announce we will have one. I am working with the Chancellor to develop a state-backed institution that will combine up to a billion pounds of new government capital with a larger private sector contribution.

"This will then apply further leverage through guarantees to support up to £10bn of finance to SMEs (small and medium enterprises) and mid-sized business - a significant portion of all the lending available."