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Oral question asked in the House of Lords, by Lord Davies of Oldham (Labour). It was answered on Wednesday, 19 December 2012.

Finance: Peer-to-Peer Lending

Question

My Lords, yesterday the Opposition expressed their best wishes to the noble Lord on leaving the Front Bench. In the Treasury team,

that Motion was carried by seven votes to one, and I am not quite sure whether I should confess to being the one. Nevertheless, I have enjoyed the cross-Dispatch Box jousting that we have had from time to time and I appreciate the Minister’s skill in replying—often, of course, defending the indefensible. Will he, on this occasion, give us real hope for the future? There is a possibility of very rapid growth of peer-to-peer lending. Is he certain that what will be in place is rigorous regulation of this developing sector? We obviously failed with regard to the banks in the past and there are a lot of anxieties about the new scheme now. This one presents particular challenges and I would like some reassurance from the Minister.

Answer

I am grateful to the noble Lord, Lord Davies of Oldham. I would not want, on an occasion like this, to point out that the previous Government did not take any policy on p-to-p lending, but it was very small then. These lenders only got into business in 2005. The critical thing is that now, having handed the challenge and the responsibility to the FCA, we will see a draft plan very soon, certainly in the first quarter of the new year, as to what the framework for regulation will be. Draft rules will come in later in the year and, as I said earlier, it is very important that we get the balance right in providing an appropriate degree of regulation, not something that kills off what is likely to be a very fast-growing and important area of activity.

Secondary information

Type
Oral question
Reference
741 c1551 
Session
2012-13
Oral question type
Supplementary
Chamber / Committee
House of Lords chamber
Subjects
Crowdfunding
Link
View this Oral question on www.publications.parliament.uk