Why the peer-to-peer revolution has got old order running scared

P2P companies like Airbnb are turning business on its head by putting customers in touch with suppliers

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THERE'S arguably no greater sign of fear than a prohibition – which makes news that the US bank, Wells Fargo, has banned staff from making private P2P loans with their own money (on grounds of “a conflict of interest”) all the more interesting. It shows just how rattled Big Banking is by the growing strength of “alternative finance” models, like peer-to-peer lending and crowdfunding.

The prevailing view is that the banks got away with the crisis scot-free. That, despite endless attempts to reform the sector, nothing essentially has changed. There was certainly destruction – but it wasn’t the healthy “creative” sort that economist Joseph Schumpeter argued held the key to renewal and revitalisation. In short, a great opportunity to restructure a dysfunctional system has gone to waste.

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writes profiles for Money Week and is City editor of The Week.