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fru-gal

Beyond Banking: Alternative Groups Seize Business From Lenders

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http://www.ft.com/cms/s/2/cbba1ff2-65cf-11e5-a28b-50226830d644.html#axzz3rJcGuZsh(you might need to search title in google to read). Very interesting article though.

i think it's certainly going to be a kick in the pants for traditional banking.

they have had it very cosy for a long time now, and a young,virile upstart challenging them for alpha-male status is definitely needed.

at the very least, it will force the banks to shape up and provide a much better,more efficient service.

worst case, for the banks ,is they will be run over and left for dead,

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i think it's certainly going to be a kick in the pants for traditional banking.

they have had it very cosy for a long time now, and a young,virile upstart challenging them for alpha-male status is definitely needed.

at the very least, it will force the banks to shape up and provide a much better,more efficient service.

worst case, for the banks ,is they will be run over and left for dead,

It would be great if it forced banks to offer higher interest rates on savings. Not holding my breath though.

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It is interesting to note that P2P lending neither increases nor decreases the money supply.

Any money going through a P2P lender must first have been borrowed into existence from a licensed bank in the usual way.

It is already in circulation and the originating lending bank continues to collect interest on its loan.

The money moves within the banking system from the account of the P2P lender, through the P2P agency, to the account of the P2P recipient. All else equal, the banking system continues to extract its interest rate spread from the circulating money.

The velocity of the money supply increases, the quantity does not.

It's distribution over the relevant bank accounts is what changes, both when the P2P loan is made and when subsequent interest and principal payments occur.

The banking system loses over the longer term since it's opportunity for new loans is lessened.

P2P lending forces a measure of efficiency onto the overarching banking system.

The goal of positivemoney is to make all lending effectively P2P.

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