[p2p-research] peer-based financial systems

[Michel Bauwens]

Hi Suresh,

are you aware of this development, regarding your pooled funds project:

Hazel Henderson:

"When the collapse came, some like-minded investors and traders had already
begun to build new exchanges from the bottom up. An underlying
infrastructure already existed in the form of alternative trading systems
(ATS). ATS are electronic markets such as Instinet and Archipelago,
regulated by the SEC, that broker financial products outside traditional
stock exchanges. The socially responsible trading networks, which use the
ATS infrastructure as a platform, are new marketplaces where investors and
companies can meet. They screen for ESG criteria, and they attract primarily
nonspeculative long-term investment.

One such new marketplace is Entrex, an “entrepreneurial exchange” based in
Chicago and focused on companies with less than US$250 million in annual
revenue. Another private liquidity network, called Wall Street Without
Walls, links credit unions and community development financial institutions
to companies. Three electronic peer-to-peer lending sites — Prosper Loan
Marketplace in the U.S.; Zopa in the U.K., U.S., Japan, and Italy; and
Qifang in China — as well as hundreds for microlending (including
MicroPlace, Kiva, Accion, and Women’s World Banking), are filling a huge
need worldwide. An index of private green companies in Brazil is now in the
planning stage with Entrex and the green broker-dealer Iowa Progressive
Asset Management.

Consider the cultural DNA of exchanges founded along these lines. They are
as robust as Wall Street in their back-office efficiency and their clearing
and settlement provisions, but they have far less overhead. They trade in
small and midsized enterprises: the 400,000 companies that provide most of
the jobs in the United States. These companies are generally privately held;
they tend to be unattractive to short sellers and market manipulators and
leery of venture capital and private equity. Many have no interest in making
an initial public offering on Wall Street.

These new marketplaces are less regulated than the public markets. Investors
are protected by the screening, the enhanced transparency, and the
disclosure requirements that constitute the wall of the garden. The networks
work because the people inside the gates can trust one another. Corporate
books are kept open and collectively scrutinized, and the emphasis on
socially responsible investing makes it more likely that these companies
will do well." (http://www.strategy-business.com/article/09314?gko=dc5ea)


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