The UK government plans to launch a £1bn emergency venture capital fund according to the Guardian. The plan was initiated by the National Endowment for Science, Technology and the Arts (Nesta), and discussed last Thursday morning in a meeting between Gordon Brown, science and innovation minister Lord Drayson and Lord Sainsbury.
The Guardian claims that the plan is likely to be finalised during Q1 of the new year and aims to draw in cash primarily from the private sector including private equity and universities. Nesta chief executive Jonathan Kestenbaum commented on the fund saying:
‘In benign economic conditions, a decision like this might take a long time. But now I think there’s a consensus in government and beyond that something needs to be done quickly. Our sense is there is real momentum.’
In Other Good News…
HSBC has announced the establishment of a $5 billion (£3.4 billion) global fund to lend money to small and medium-sized businesses affected by the credit crunch – £1 billion of which is to be kept specifically for the UK.
A spokesperson for the banking giant, which has 9,500 offices around the world, said:
“The fund has been designed to help customers with fundamentally sound businesses weather short-term shocks caused by the downturn, by supplying working capital to help businesses with their cash flow needs and support businesses that trade or aspire to trade internationally.
“The fund represents new money and will be funded from HSBC’s own resources, allocated on a case-by-case basis using the bank’s normal lending criteria.”
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The move has been made soon after the banking industry has been criticized for not passing on the full benefit of interest rate cuts from the government onto consumers.
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