Article in Wednesday’s papers
Article in Wednesday's papers about Peer-to-Peer lending which is supposed to be an alternative to banking. Actually, both are based on the same principle of people with money who don't want to use it themselves for the time being lending it to people who do need money for something. Banks are not doing anything essentially different from the P2P companies. They too are financial intermediaries. In both cases the money has to be there and, as Lord Turner points out, the borrowers need to be checked to see that they will repay any loan. Banks, No one has yet come up with the theory that P2P lenders can create the money they lend out of thin air.http://www.theguardian.com/money/2016/feb/10/former-city-regulator-warns-peer-to-peer-lending-lord-turner