Alternative lenders brace for regulatory onslaught

April 1, 2016

Avant is the first major fintech player to put a former watchdog on its board – ex-FDIC Chair Sheila Bair. Rivals have tapped Wall Street to bolster business. But the mix of new lenders’ success, high charges, rising rates and defaults is catching the eye of financial overseers.

Thruppence: Can Snapchat unmask dodgy borrowers?

May 11, 2015

Alternative lender Affirm has raised $275 mln for a model that rates creditworthiness using social media data alongside other old-school indicators. Breakingviews columnists debate whether info gleaned from Facebook and its ilk could supplant traditional credit-scoring methods.

Review: Fulfilling paper promises

May 25, 2012

The global economy is changing, says Philip Coggan, and people in the West may suffer as a result. Maybe so. But benefits will surely accrue widely if change means borrowers kick the habits of history and meet promises to repay creditors.

UK banks’ euro zone firewall needs government help

June 13, 2012

Despite a recent re-tooling, the Bank of England still can’t provide lenders with three-year loans like those offered by the European Central Bank. That could leave lenders exposed if the euro zone cracks. It may be up to the UK government to support long-term bank credit.

Corporate China beating banks at their own game

October 17, 2012

Banks and bondholders aren’t the only ones working to keep the country’s debt-fueled party from crashing: companies are also lending more to each other, for longer. As growth slows, the risk is that rising past-due bills make it hard for the private sector to repay mounting debt.

Draft obit for 2020: 2-and-20 fee structures

December 28, 2012

The archetypal hedge fund fee deal survived the 2008 crunch and the euro zone meltdown, but not the industry’s growth. Asset gathering, tight controls and cautious bets by a new generation of fund bosses brought a decade of low returns. Fee gravity was irresistible in the end.

Rumors of credit bubble only partially exaggerated

May 28, 2013

Some risky forms of debt have made a dramatic comeback, but few investors seem panicked that another credit crisis is about to erupt. Breakingviews offers its own bubble-meter for the credit market. The reading: frothy, but not yet in the danger zone.

Review: Tales from China’s wild lending frontier

June 28, 2013

Former banker Joe Zhang spent a year running a microcredit firm, then wrote about it. “Inside China’s Shadow Banking” is part memoir, part advice for reining in the country’s credit boom. Despite the title, it’s the regular banks that are the ultimate source of the trouble.

How to cut the cord on China’s shadow banks

July 3, 2013

The explosion in non-bank credit is helpful, so long as it doesn’t bounce back on regular lenders. Ringfencing the risks requires banks to stop using cheap funding to lend off balance sheet. Savers also need to learn that investing in high-return products is no free lunch.

The lowdown on China’s slowdown

July 12, 2013

This year’s expected GDP growth has shrunk. Weak exports hurt, but 7 percent may be the new normal in a richer, ageing country with a legacy of poor credit allocation. It’s too simple to say the government can make slower growth work - but too early to brace for a hard landing.