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When have I ever said that what you do does not work or is not valuable? It's exactly the sort of banking as a valuable service that I advocate. But you are constrained - you say so yourself - by a shortage of capital.

You are making the classic conservative argument against anything new.

"Nobody will use it because nobody is using it."

Moreover, you are once again agglomerating development finance with long term finance when - as I have said at least a dozen times by now - these are like Chalk and Cheese.

Unitisation of existing assets - the replacement of secured debt with a new form of quasi equity thereby - is IMHO a killer application capable of changing the face of global finance through:

(a) Resolving the Credit Crunch - through refinancing unrepayable property debt;

(b) Financing the transition to renewables through unitisation of energy.

Development financing will take more time to evolve from the conventional debt/equity model, since it will require a change in the enterprise model, and a new approach to equity investment.

What unitisation of existing assets would do for you as a project financier is to free up your development credit for assets you wish to finance. In other words, to recycle your capital.

There is a huge pool of funding out there looking for direct investment in energy. Assuming that there is a suitable framework of trust, which IMHO requires a decentralised clearing union, rather than a centralised clearing house, do you think that the Chinese and Japanese (for instance) would rather hold T Bills or Units redeemable in payment for gas supplied?

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sun Jan 3rd, 2010 at 10:21:33 AM EST
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