FSB: Use Rock to end the banks' credit monopoly

THE government should consider using Northern Rock as a &ldquo;people&rsquo;s bank&rdquo;, operating via the post office network, to increase the flow of credit to small firms, the Federation of Small Businesses (FSB) said yesterday.<br /><br />The FSB said that the state support offered to banks had allowed them to develop a &ldquo;monopoly&rdquo; on providing businesses with financing, damaging competition.<br /><br />The organisation said that credit should instead be made available through other channels, such as Post Offices, local councils or Regional Development Agencies.<br /><br />FSB chairman John Wright said: &ldquo;Despite government bailouts and interest rates set at a record low, small firms are still finding it tough to access affordable loans and overdrafts from banks.&rdquo;<br /><br />He said that one solution would be to use Northern Rock as a lending conduit to small firms, through Post Office branches.