News

An Open Invitation to Lord Turner

Published on February 11, 2016

During yesterday’s BBC Today programme, Lord Turner, ex FCA regulator turned Banker, declared “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”.

 

To put that into perspective, the National Audit Office revealed the full extent of the UK government’s bailout operation with regards to the UK banking sector and money markets was an eye watering £850 billion. I struggle to comprehend under what circumstances the Peer-to-Peer Lending (P2P Lending) industry could possibly make these bankers look like geniuses and why Lord Turner, who presided at the FCA during the crisis, is so against an industry he likely has little knowledge of given his most recent comments.

 

It’s a shame as Lord Turner’s uninformed comment and its subsequent backlash from the P2P industry, undermines the very pertinent question “What will peer-to-peer losses look like in the future?” There will be losses to peer-to-peer investors since from the start of time borrowers have failed to make payments on loans and will continue to do so. P2P Lending will not eradicate borrower default or investor losses.

 

P2P Lending offers Investors, in the current long term low interest rate environment, the opportunity to earn attractive rates of return. Like any investment, they must weigh up the risks. When investing in P2P loans, investors must determine whom they lend to, against what loan types (consumer, SME or property), via which platforms and most importantly understand which model of P2P lending the platform offers. P2P Lending is about transparency never has the individual investor had access to such information on which to make informed investment decisions.

 

We at Proplend extend an invitation to Lord Turner to come and meet with us and then make an informed comment on the peer-to-peer sector.

 

Brian Bartaby, CEO & Founder, Proplend