Project New Bank, which is being set up by City grandees Lord Levene and Sir David Walker, aims to put high street bank managers back at the heart of lending decisions.
Poised to launch soon, the bank will give local branches the power to make their own decisions on lending to small business and individual borrowers. By making decisions at a local level, it will be able to keep risks low, confining any failures rather than feeling the effects throughout the group.
Project New Bank plans to buy branches from Lloyds Banking Group – which has confirmed that the sale of 600 branches would go ahead by the deadline of November 2013 - and Northern Rock in order to build up its business.
These new plans, which push local decision-making as opposed to a more centralised method, are expected to appeal strongly to small businesses, who have complained that staff in many existing branches lack the necessary powers to lend money.
Project New Bank will still offer internet and telephone banking, with the initial vehicle expected to be valued at around £50 million.
As well as Lloyd's of London chairman Levene and former City regulator Walker, the bank has signed up Lord McFall - former head of the Treasury select committee and MP for Dunbartonshire West - and Charles McCreevy, Ireland's former European Commissioner, as directors. 
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