During 2012, we have seen a host of issues in the finance world. These include:
- PPI mis-selling
- Record fines for various Banks (the latest being a $1.9bn fine for HSBC for money laundering.)
- LIBOR scandal
- More recently we have seen signs of another mis-selling scandal – Swaps.
In addition, through Basel II and Basel III, Banks will be required to hold far greater levels of liquid cash on their balance sheets to cope with various disastrous scenarios. This has led to Banks tightening up their risk appetite and hence losing all goodwill they once had with SMEs.
The Banks unwillingness to lend to SMEs has seen the emergence and rapid growth of an entirely new type of finance – Peer-to-peer lending e.g. Funding Circle.