The time is ripe to launch Spectator Bank

Bankers are often accused of having such short memories that they are condemned to repeat the errors of their immediate predecessors, only more so. They would certainly need elephantine memories to remember a time when new banks, each with a distinctive mission and marketplace, were coming to life and flourishing everywhere. Indeed it was, in a corporate sense, Britain’s oldest banker — Alexander Hoare, 11th-generation head of C. Hoare & Co of Fleet Street, though himself still only in his forties — who pointed this out to me long before the credit crunch started knocking over high-street lenders like wonky dominoes. ‘It’s a sign of market failure that so many consumers are dissatisfied with their existing banks yet there are so few green shoots, so few new banks springing up as Hoare’s and many others did,’ he told me in an interview for The Spectator in October 2004.

He was recalling the 1670s, when his ancestor Sir Richard Hoare first opened for business at the sign of the Golden Bottle, a couple of decades ahead of the Bank of Scotland in Edinburgh and the ancestors of Barclays in Lombard Street. Throughout the 18th century, small-town banking partnerships grew up — and mostly prospered — aligned to the needs of local trade, agriculture and nascent industry. In 1775, the building society movement was born in Birmingham; by the mid-19th century, as people flocked to cities and towns for factory work, there were 1,500 of them. Among those whose owners or successors have recently had to be rescued by the taxpayer, the Cheltenham & Gloucester, currently subsumed into Lloyds, dates from 1850, as does the Northern half of Northern Rock. The Bradford Equitable and its neighbour the Bingley opened for business a year later, shortly followed by the Halifax Permanent, which became the H in HBOS.