"Des waerelds doen en doolen, is maar een mallemoolen,"

"Des waerelds doen en doolen, is maar een mallemoolen," engraving from Het Groote Tafereel der Dwaasheid, 1720.

"The actions and designs of the world go round as if in a mill." South Sea bubble financial crisis.

Monday, September 26, 2011

Financial innovation with valuable social function ?


 



Peer-to-peer lending is on the rise. One could view this phenomenon through the perspective of a change of financial function. Traditional banks have a walk away from lending services and concentrate much more on transaction. The internet revolution aside, the rise of P2P might be a consequence of the move toward market-based systems. Wonga, a british P2P lending firm, has attracted much criticism. Its boss defends the firm's valuable social function:


They are picking on the wrong people. We are the good guys," Damelin says of his critics at Westminster, who refuse to meet him. "Yes, we're in a space that is controversial, that is polarising. But it is an important social service. To have social mobility you have to have credit available to people where its required and where it's appropriate .



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