A People’s Bank, owned by its customers that will only do business with people and organisations in the North East, could become the first of its kind in the region.

Funding for a study to explore the feasibility of establishing such a bank has been approved by the Cabinet of the North of Tyne Combined Authority (NTCA).

The development of a People’s Bank was a key commitment outlined by Jamie Driscoll, the elected North of Tyne Mayor, in his electoral manifesto. Its aim is to support sustainable economic development by retaining banking profits in the North East.

Collective savings of the region would then be recycled into local business loans and mortgages.

The study will be undertaken by independent experts who will explore the feasibility and financial viability of establishing a regional bank and the business model will be carefully scrutinised before major funds are committed to the project.

Mayor Driscoll welcomed the development 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.”

If the model is given the go-ahead the bank could be up and running in three years.