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I can't agree with that:

DXebt finance as the dominant mode of finance is dead.  The future has to be built around much greater equity, bond, and revenue sharing models linked much more directly to productive enterprises where risks and rewards can be measured in a reasonably transparent way.  

We are in a crisis to a arge extent because no riks analysis was performed on underlying assets, and one of the reasons this happened is that those that structured the financial instruments did not hold them - and did not really care if they were sound: they only cared if they were marketable, which is not the same thing.

Bank debt, held for the long term, based on thorough analysis of the borrower by the bank, which keeps the asset on its books, is a lot safer. Less profitable, boring, but certainly safer.

Peer-to-peer finance does not work because nobody can do the requisite risk analysis.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Mar 23rd, 2009 at 05:46:33 PM EST
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