Jane Croft

December 16, 2006

Financial Times 


Banks should be more transparent about disclosing details
of their lending in socially deprived areas to help tackle financial exclusion
following the US
model, says a report.

A study by the New Economics Foundation, an independent
think-tank, and the US-based Woodstock Institute gives the first detailed
comparison between the UK
and the US. In
the US, banks
have disclosed details of their lending and investing in poor areas since the
mid-1970s. The NEF believes greater bank disclosure in the UK
could prompt a real shift in the way banks act and invest in the most
disadvantaged areas.

Jessica Brown, head of access to finance at NEF and lead
author of the report, said: "Bank transparency on lending practices and
branch location by postcode would mean that the availability of banking
services could be clearly identified – a central part of tackling financial

The report compared Charter One Bank in Chicago,
where banks have disclosed lending practices since the late 1970s, with Charter
One's parent company the Royal Bank of Scotland
in Manchester. The study showed
there was little information available in the UK
about area-based lending. However in the US,
it was able to carry out detailed analysis into lending in socially excluded