A new bank – which is owned by its customers and only does business in the north east – may soon become a reality.

Funding for a study which will explore the feasibility of such a bank has been approved by the cabinet of the North of Tyne Combined Authority, an administrative region that covers Newcastle, North Tyneside and Northumberland.

The People’s Bank would boost the local economy by keeping banking profits in the north east and by recycling the region’s savings in the form of loans to local businesses and mortgages for local people.

In a time of local bank closures, the People’s Bank would have physical branches and cashpoint machines.

Setting up a People’s Bank was a key manifesto pledge of Jamie Driscoll, the elected North of Tyne Mayor.

The feasibility study will be carried out by independent experts, who will look into the financial viability of creating a regional bank and will examine the People’s Bank’s business model.

The study will be undertaken before any significant funds are committed to the bank. If the experts give the People’s Bank the green light, the bank could be launched in around three years’ time.

Mayor Driscoll welcomed the announcement about the feasibility study and said, “Prosperity requires money. A regionally-based and customer-owned bank will promote local economic growth and prevent money leaking out of the north east.”

“The bank will have a full range of services – current accounts, mortgage lending and business banking with physical branches and 24-hour automated services.”

“It will be run on a one-person-one-vote co-operative basis as well as being legally asset locked so it can never be privatised. It is the safest model of banking there is.”

(This article’s featured image is courtesy of GotCredit from Flickr Creative Commons.)