This is quite fascinating... The CBI are basically endorsing (presumably unknowingly) OUR policy - Green Party policy - on local-business-banks!
See e.g. http://policy.greenparty.org.uk/mfss/min.html :
'Local Initiatives - Long-Term Action
IN504 Small businesses in the UK find it difficult to get timely access to external funds and affordable interest rates. Community Banks are needed which have funds available for local activities. (see EC512)
IN505 Community Banks would give local firms and co-operatives access to funds managed locally and supplied at preferential rates. This would favour activities identified by the Local Government Local Development Plan. The allocation of funds would make use of environmental impact analysis but be simple enough to be understandable.
IN506 A pilot Community Bank scheme (in a region with high unemployment) combined with regulatory changes to divert borrowing from conventional banking methods (see EC668) would allow Community Banking to develop.'
And now it appears the government has swiftly responded / responded to a coincidentally-timed independent review of much the same terrain:
This seems good news!