BoE's Andrew Haldane: technology based transparency driving revolution in banking

The Bank of England's Andrew Haldane noted that a revolution in banking is occurring as technology based transparency is creating opportunities to replace the opaque banks.

Specifically, as reported by Reuters, he said,

"Technology has changed every other industry such as film, music and even football clubs, so why not finance? 

With open access to borrower information - which is held centrally and virtually - there is no reason why end-savers and end-investors cannot connect directly,"...

Please re-read the highlighted text again as Mr. Haldane has nicely summarized why there is a need for observable event based reporting for structured finance securities if that market is to be restarted and for banks to provide ultra transparency.

End-investors are interested in putting money at risk when they have open access to borrower information through a data warehouse.  End-investors can independently assess the risk of the borrower and set their exposure to the borrower based on this assessment of risk and the end-investor's capacity to absorb losses.

End-investors are not interested in investing through an intermediary that creates opacity so the end-investor does not have open access to the borrower information.

Britain may be facing a banking revolution as technology transforms business lending and the dominance of its banks, a senior Bank of England official told the Independent newspaper on Monday. 

"The mono-banking culture we have had since the 1990s is in retreat," said Andy Haldane, the BoE's executive director for financial stability. 

"We are seeing a much more diverse eco-system emerging with the growth of new non-bank groups offering peer-to-peer lending and crowdfunding which are operating directly with a wider public," he said. 

Peer-to-peer lenders directly match up firms in need of cash with investors, and so-called crowdfunding, raises small amounts from a large number of funders. 

Please note that these solutions are based on the use of technology to provide transparency to the investor.