Birmingham city council, the UK’s largest local authority, is planning to create a bank to lend up to £200m ($294m) to small businesses.

The bank, likely to be known by its folksy acronym – Bob – rather than its full name, the Bank of Birmingham, would also take retail deposits. It would aim to cushion damage to the local economy from the credit crunch. But it would also hark back to a municipal bank set up in 1916 by Neville Chamberlain, the Birmingham mayor who later became prime minister.