Birmingham's stock exchange could be resurrected, says Vince Cable
Jul 27 2010 by Jonathan Walker, Birmingham Post
Birmingham’s stock exchange could be resurrected under plans to help West Midlands firms raise money, set out by Business Secretary Vince Cable.
He has launched a consultation on whether the regional stock exchanges should be re-opened.
The city’s exchange was originally opened in 1845, as a result of the city’s thriving industry and reputation as an international commercial centre.
Members met in the old Royal Hotel and various hired rooms in Waterloo Passage, before moving into its own premises on the corner of Margaret Street and Great Charles Street.
But it was absorbed into the London stock exchange in 1971. The building remained a subsidiary hub until the Big Bang in 1987, when traditional dealing floor was replaced with new technology.
Dr Cable’s proposal is to re-open the regional stock exchanges to make it easier for firms to attract investment.
Birmingham, Edinburgh and Glasgow would be the first candidates for setting up regional exchanges.
There is nothing to stop a West Midlands business becoming listed on the London stock exchange but the process is expensive, and Dr Cable believes medium-sized forms are being excluded from raising finance.
The Business Secretary set out his proposal in a Government green paper explaining Government plans to support the employers, published jointly with George Osborne, the Chancellor.
But he said he wanted to hear from opponents of regional stock exchanges as well as supporters.
In the paper, the Government invites ideas about helping firms attract investment. It asks: “How can Government ensure that the best small businesses in all parts of the UK are visible to publicly backed venture capital funds?
"Should Government intervention to address the equity gap focus on the best firms regardless of geography, or seek explicitly to address regional economic disparities?
“The Government would be particularly interested in views on regional stock exchanges.”
Dr Cable said: “If we don’t anticipate and tackle finance barriers now we could face a big problem in the future. Left unchallenged, a lack of accessible finance for businesses could prevent the recovery accelerating.
“I’ve heard the problems businesses are facing in getting bank loans up and down the country. They need innovative ways to access finance from other sources to grow our firms and economy. That’s why this green paper is so important as we look to help viable firms get the money they need.”
Mr Osborne said: “As the economy recovers, it is crucial to ensure that the supply of finance supports rather than constrains demand and business confidence.
"If businesses are to play their part in promoting economic recovery it is important that they are able to access a diverse range of finance choices in a stable macroeconomic environment.”
Other options to be considered include helping firms get listed on the London exchange.
