Weekly industry news roundup – December 12, 2016

AROUND THE WORLD

On Saturday Crowdfund Insider reported on new communication from Moody’s regarding the recent decision to grant bank charters to FinTech firms. According to the statements Moody’s believes the move will reduce inherent legal risks involved in the origination process.


Nasdaq posted an article on Friday about emerging rules for Chinese P2P lenders. The new regulations are designed to suppress fraudulent activity and illegal operations. If successful the rules should prevent marketplace lenders from engaging in needlessly risky behavior.


Business Insider shared views from the CEO of the Financial Conduct Authority. He remarked that the marketplace lending world presents “some quite big challenges in terms of transparency and fairness.” His remarks illustrate the value of a P2P firm that engages in open and clear communication with customers.


ABL Advisor shared information from Moody’s. The agency has stated that they expect the credit quality of marketplace loans originated in the US to hold steady throughout 2017. Additionally, they anticipate greater industry scrutiny as more borrowers turn to this relatively new form of lending.


Finance Magnates explored the benefits of P2P lending as an investment strategy that can occasionally outperform more conventional instruments. The author explains the growing interest in marketplace lending to generate returns because “you can expect returns significantly higher than those on offer from a high-street bank. With a record-low base saving rate of 0.25%, it is little wonder people are searching for an alternative”.

BONDORA MENTIONS

Our German readership can read an article by DEAL-Magazine about the vast differences in interest rates within the Eurozone countries. With examples like Spain where credit market is tilted more towards short term, high interest credit financing and Germany where credit market is strictly regulated, which protects the borrowers but also caps potential interest earnings for investors. This uneven interest rate landscape creates an opportunity for all P2P lending companies to close the gap and serve better deals for both borrowers and investors.

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