Look local for safe haven for your cash

Nov 12 2008 by James Ramsbotham, The Journal

THE swift collapse of the Icelandic banking sector has impacted on many quarters of the North East community.

Much has been publicised about the personal losses, the frozen assets that are protected by Governmental assurances and, most worrying of all, the potential loss of many millions of pounds worth of taxpayers money that was invested overseas in good faith by public bodies from the region.

This catastrophic situation will lead councils to run for safer cover when they invest savings in the future. Some are talking openly about seeking solace in Government bonds.

However, there is an opportunity that exists to invest this money in a fashion that will bring far greater additional benefit to the region.

This opportunity is simple. Instead of putting millions of pounds in to bonds, public-sector bodies ought to look to our local banks and building societies as safe deposits with wider local returns.

The North East Chamber of Commerce has campaigned strongly over the past year for the public sector to understand and embrace the benefits of supporting local businesses. This investment opportunity is a classic case in point.

By using local banks and building societies it further strengthens their position, which gives greater confidence to local people who rely on these institutions for employment.

This, in turn, will also give increased confidence to these institutions and encourage them to support local homebuyers and businesses in the region.

The swiftest way out of the current economic position is to restore confidence across all parts of the North East. By restoring confidence, we will begin our recovery and by injecting the sizeable sums that the public sector has to deposit, this has the potential to be a real shot in the arm for our region.

By emerging more quickly from the current predicament than other parts of the UK and the wider world, it would also put us ahead of the game and offer up the opportunity to put the North East back at the forefront of growth.

James Ramsbotham is chief executive of the North East Chamber of Commerce.

The swiftest way out of the economic position is to restore confidence across the North