Structure of P2P lending and investor protection: Analyses based on an international comparison of legal arrangements

Atsushi Samitsu
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Atsushi Samitsu: Bank of Japan

No 17-E-6, Bank of Japan Research Laboratory Series from Bank of Japan

Abstract: P2P lending is direct lending between lenders and borrowers online without using traditional financial intermediaries such as banks. There has been a rapid increase in the amount of outstanding loans in P2P lending in recent years, mainly in the UK, the US, and China, since a major P2P lending platform in the UK was launched in 2005. In this paper, the structure of P2P lending and its characteristics are analysed using banks as a reference point. This paper also highlights the fact that the legal arrangements in P2P lending vary from country to country and those differences could affect the degree of investor protection. Samitsu (2017) explains that under the current legal arrangement in Japan, investors assume the credit risk of P2P lending platforms, and proposes utilising schemes such as specific purpose companies and specific trust companies to strengthen investor protection.

Keywords: P2P lending; Financial intermediation; Banks; Systemic risk; Investor protection; FinTech (search for similar items in EconPapers)
JEL-codes: K22 (search for similar items in EconPapers)
Date: 2017-10-23
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-law and nep-pay
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Citations: View citations in EconPapers (2)

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