Sir Vince Cable, until May 2015 the Secretary of State for Business, Innovation and Skills, joined the Hampshire Community Bank as its Chairman on 30 June 2016. He resigned on 2 July 2017, because he had been re-elected as MP and was nominated as LDP party chairman. He was formally appointed as LDP party leader on 20 July 2017.
Sir Vince has been a long-standing supporter of German-style community banking, which dominates the German banking sector (70% of deposits and over 80% of all banks are not-for-profit community banks, either of the savings bank or co-operative bank variety). The strength and resilience of the German economy over the past 200 years, despite wars and catastrophes, has been linked to the thriving small and medium-sized firms, which account for over 70% of employment. 200 years ago, community banks were founded in Germany and over the years came do dominate banking. Since small banks lend to small firms, while big banks lend mainly to big firms, it is this structure of the banking sector that has been at the core of the long-sterm strength of the German economy. Thanks to the many local community banks in Germany, German SMEs are industrial and exporting power-houses. Germany boasts by far the largest number of SMEs with a firmly established leading role in a particular market niche (so-called ‘hidden champions’). This has been largely due to the existence of the hundreds of community banks. Sir Vince also appreciates the German apprenticeship system, whereby community banks encourage local firms to train staff, while they themselves train generations of experienced local business leaders (as community banks accept many more apprentices than they need, many later join local SMEs, where their training and knowledge of banking is very helpful). For more on Sir Vince’s views on banking, please see this article, which is based on his speech at the European Conference on Banking and the Economy (ECOBATE) in Winchester in October 2013.