Get Rid of Banks and Replace Them With P2P Lending?

That’s a bid radical for me – and I would never demand that. But that’s the tenor of the paper ‘Get rid of banks and build a modern financial world!‘ by Richard Lenz.

He argues:

… This trend must now be continued in regulatory and economic politics: The web-based transferal of capital over Internet platforms will replace conventional banks step-by-step as an intermediary. That the web-based “peer-to-peer lending (P2P)” works successfully is documented by credit-platforms like “smava” in Germany, “Prosper” in the US, and “Zopa” in the UK.
Peer-to-peer lending over a web-based transfer-platform has vital advantages for the “players”:
+ P2P-lending is attractive for the investors (creditor) as well as for the credit user (debtor), because they can share the bank margin, meaning the difference between deposit and loan rates. The platform receives merely a transferal commission. These charges are much lower than the bank margin, because they do not have to finance fancy skyscrap-ers at great locations or bonus payments for investment bankers.
+ The platform only takes over the transferal and does not enter into a contractual posi-tion. Hence, there is no systemic risk, because risks are now peripherally distributed throughout the users.
+ In turn, investors can diversify the default risk by getting involved in various financing projects with small sums or by joining investor groups via the Internet.
+ Money’s undefeatable homogeneity makes it into a product, which is ideally suited for web-based transferals. The advances of information technologies can fully realize its economic benefits here. On the transaction platform, the application of information technologies will clearly increase the transparency, the competition and also the mobility of capital, in comparison to the oligopolistic bank market. Better transparency, increased competition and last but not least, the cessation of bank margins, reduce capital costs and simultaneously simplify accessing capital. From an economic standpoint, these advantages have the potential for a quantum leap within the economic growth of participating market economies.
+ Increased transparency, central processing, and documentation within the transaction platform considerably simplify controlling and supervising finance market transactions. The extensive public resources that have been used for controlling banks so far can now alternately be used to protect investors.

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