A "social investment bank" could be set up to distribute the millions in unclaimed assets sitting in dormant bank accounts across the UK to charities, according to a government-backed report.
The report, compiled by the Commission on Unclaimed Assets, proposes that a fund of an estimated GBP400 million should be used to capitalize an institution that could help finance charitable and voluntary projects.
The idea is based on similar schemes in the US such as the Local Support Initiatives Corporation, which uses its access to financial markets to help fund projects in deprived areas.
Unclaimed assets are monies that have been left untouched by their owners in financial institutions for a considerable amount of time. A 15 year definition for dormancy has been proposed, although the British Bankers Association and the British Building Societies Association are currently developing proposals for a regulatory framework.
The report claims that the bank would play a leading role in creating new investment capital markets that turn social investment into a recognized asset class, combining financial expertise and social sector knowledge. The bank would offer loans, grants, lease financing for capital purchases, bonds and financial advice to charitable and social organizations.
The commission will now begin a consultation period to last until December before a decision is taken in time for the next Budget.