The Government's announcement that it's considering setting up a "bond bank" to help local authorities finance $30 billion worth of infrastructure projects is a big tick for the Prime Minister's Jobs Summit.

So says investment banker Rob Cameron, whose firm Cameron Partners is one of those tasked with studying the proposal.

Two schools of thought converged at the summit - the local body sector, which had been considering what to do about its enormous upcoming need for capital, and the funding group chaired by Cameron which looked at the idea of a so-called bond bank. The Capital Markets Taskforce had also considered it separately, Cameron says.

"The end result was an agreement on a scoping study to get this done."

The concept is well-developed overseas and bond banks exist in a wide variety of forms - from those which are completely commercial, through to those which require a level of government support.

Cameron says they can be merely conduits that aggregate local body loans, or they can be a kind of bank that issues a wide range of bond maturities to meet both investors' and local authorities' needs.

Investors get the benefits of local governments' excellent credit ratings, low transaction costs and a "nice blended instrument". Councils also benefit from lower transaction costs, plus they get superior terms and conditions, increased liquidity, and certainty for their funding programmes. "You get considerable benefits from economies of scale," he says.

If it's such a good idea, why hasn't it been done before?

Three factors stood in the way, he says. Firstly, councils had fairly modest infrastructure programmes. With expensive projects to upgrade wastewater systems, roads and the like now on their books "that's going to change dramatically".

Secondly, credit market conditions were vastly different. Banks were falling over each other to lend money. Then came the credit crisis. And local bodies had not co-ordinated themselves sufficiently to tackle the project.

The Jobs Summit pulled everyone together including, importantly, Treasury.

"If the Minister of Finance is going to think that this is something that doesn't need any Government support, well, let's not go and develop a business model that does."

The scoping study is the beginning of a process, Cameron says, which may end up with the local government sector taking it over itself.