Easy access to capital

Wingham Rowan

Chapter Chapter 6 in Net Benefit, 1999, pp 43-46 from Palgrave Macmillan

Abstract: Abstract A public markets system would allow users to lend and borrow money without incurring the overheads of a financial institution, or the fragmenting of the marketplace for capital under multiple sales channels. The GEM for loans would be an anomaly within the system, the only market in which one user could be in danger of defaulting on another. Elsewhere, contracts cannot be signed unless funds are available to go into escrow. GEMs’ commitment to guaranteed trading precludes the uncertainties of debt chains or potentially defaulting creditors. Users without reserve funds of their own would need to turn to the loans market, where lenders decide the level of risk they are willing to assume. Once again the matching between suppliers and purchasers is of fine ‘granularity’: a typical transaction might involve lending $100 for a week.

Keywords: Credit Rating; Money Market; Loan Market; Reserve Fund; Typical Transaction (search for similar items in EconPapers)
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-333-98280-8_7

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DOI: 10.1057/9780333982808_7

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