Local authorities have been quick to support a bespoke public sector investment fund designed to provide a safer haven for cash deposits, following the Icelandic banking collapses and the recession.

The Public Sector Deposit Fund (PSDF) was formally launched on 25 May, but has already received more than £100m in initial funding from at least 30 public bodies, including the Corporation of London – the local authority which houses the Square Mile, and its inherent finance expertise.