RR16: Banking on change: Community Reinvestment and re-thinking the UK financial system

26th September 2009.

Drawing on the body of reports, articles and general commentary that has emerged on the subject, this Rapid Research explores the concept of responsible finance, especially community reinvestment banking, including the growing campaign for a more responsible financial system in the post-recession era and how this might be rolled out in the UK.

This Rapid Research has been produced by the Centre for Local Economic Strategies (CLES) in partnership with Urban Forum, a national charity and membership organisation that supports communities to have a greater say over decisions that affect them. The pursuit of a fairer banking system is a major campaign of Urban Forum which CLES fully supports. Strengthening the financial sectors corporate social responsibilities and therefore creating a new approach to finance by making sure all sections of the community are treated fairly in terms of access to financial products will help to create more resilient and equitable communities in the future. This publication analyses existing evidence to support both change per se and introduction of responsible finance principles to the UK financial system. It concludes that firstly, change is essential for overcoming persistent financial exclusion and secondly, that community reinvestment offers a beneficial way forward for the UK but is a long term option that needs to be supplemented in the shorter and medium terms by other options for socially responsible banking.