P2P industry slams FSA chair's P2P critique

Former FSA chair Adair Turner today argued that "the losses which will emerge from peer-to-peer lending over the next five to 10 years will make the bankers look like lending geniuses".

Related topics:  Specialist Lending
Rozi Jones
10th February 2016
Adair Turner

Speaking to the BBC, he argued that "you cannot lend money to small and medium sized enterprises without someone doing good credit underwriting".

Lord Turner also warned that "interest rates in the UK may not go up beyond 2% by 2020", claiming that the UK economy could be stuck with low interest rates "almost indefinitely".

However the peer-to-peer industry has hit back at Lord Turner's claims, calling them "incorrect and misleading".

Christian Faes, co-founder & chief executive of LendInvest, said:

"I don't think we can trust the person who presided over the worst financial meltdown in history to tell us who are or aren't lending geniuses.

"His comments also do the FCA a disservice. Having just returned from meeting P2P companies in China, I've seen the real P2P wild west in action. The FCA is doing the right thing by regulating our industry. It might cause a shakeout, but this is a good thing and will leave the lenders that remain stronger, more confident and more credible.

"These comments are self-serving and timed to drum up more sales of Lord Turner's book on Amazon. Surely he is conflicted too, given that he's now regulator-turned-banker himself."

Landbay CEO John Goodall added:
 
“To presume that all platforms use automated underwriting processes is incorrect and misleading. The peer-to-peer industry is both broad and diverse, and to paint it with a single brush stroke as dangerous is ultimately unhelpful for consumers.

“To write off peer-to-peer lending now is to ignore the same innovation which has permanently transformed the global hotel accommodation and taxi industries.”

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