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These kinds of startups have an advantage for small loans, but for larger ones the "real" banks that don't have to carry all the money they lend (fractional res
by jorleif 17y ago
These kinds of startups have an advantage for small loans, but for larger ones the "real" banks that don't have to carry all the money they lend (fractional reserve banking) have quite an advantage. Also, in a system where people loan directly from each other the money supply is constant. That's bad if you want economic growth, and I suppose, good if you're an environmentalist.
If you want to do away with banks you would have to somehow do away with the fractional reserve system. Any ideas on how to do that?
- ThomPete 17y agoWell Things have to start somewhere. A new "financial system" will have to grow naturally to create any sort of stability, that is based on the trust in the system. And mind you your bank adviser is not really an adviser but a salesman. If you want advise on money use Mint.com. There is nothing that hinders this kind of thinking to scale. Microfinancing shows that there are money to be made in decentralizing where the money comes from and where they go to. It fit's perfectly into the "spread your investments" that seems to be the most stable. To add to that, I actually think the future will bring much more small to medium sized companies than necessarily large organizations so it seems to be the right way to approach it.