Research Handbook on Shadow Banking
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Research Handbook on Shadow Banking

Legal and Regulatory Aspects

Edited by Iris H.-Y. Chiu and Iain G. MacNeil

Research Handbook on Shadow Banking brings together a range of international experts to discuss shadow banking activities, the purposes they serve, the risks they pose to the financial system and implications for regulators and the regulatory perimeter. Including discussions specific to the UK, European Union, US, China and Singapore, this book offers high level and theoretical perspectives on shadow banking and regulatory risks, as well as more detailed explorations of specific markets in shadow banking.
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Chapter 10: Out of the shadow? Promises and challenges of peer-to-peer lending

Mingfeng Lin


The traditional banking industry’s business model is fairly simple: take the deposits from borrowers (supplier of funds) and then act as lenders to those who need the funds (demand side of funds). Banks serve many important roles in that process, and are also able to generate excellent returns for their activities. Peer-to-peer (P2P) lending represents one of the most fascinating challenges to the traditional banking industry in a very long time. With the growth of Internet and information technologies, in the middle of the 2000s many P2P lending startups emerged around the world. Some of the most notable examples include in the US and in the UK. They started to link borrowers and lenders of funds directly, rather than having them go through banks. The borrowers on these platforms can be individuals or firms. Most platforms, including and, focus on individual borrowers. Other platforms cater to the debt financing needs of businesses, particularly small and median businesses. Examples include and in the UK. Early on, most of the lenders on these platforms are individuals as well.

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