The Anonymous Widower

An Investigation Into The Stability Of Peer-To-Peer Lending Systems

For some time, I’ve thought that peer-to-peer lending systems, and Zopa which I know best, in particular, are a very interesting proposition mathematically. I did muse on this question some time ago in Stability in Financial Systems.

My education is at Liverpool University, where I got a B. Eng degree in Electronics in 1968.  I had specialised in Control Engineering and my undergraduate thesis was all about mathematical modelling.

Most of my career since has been about large business, monetary and planning computing.

But one thing that must be born in mind, is that after I sold Metier in 1985, I formed a finance company in partnership with a friend.  We still talk so it must be a good relationship.

In the years I had a stake in that company, I modelled the cash flows for obvious reasons of watching risk, just as I do with my funds invested in Zopa now.

The company taught me a lot about the finance industry and it was partly for that reason, that I invested my savings in Zopa nearly six years ago. And I’ve not regretted it one bit!

As I said in Stability in Financial Systems last year, I have a feeling that Zopa is a stable system.  I also think they have used this stability to their own advantage, to create their Safeguard offers.

Obviously, a full investigation would be of value to see how, if Zopa my proposition concerning the system is correct.

You would just right down the various cash flows and see how the various scenarios will affect the company.

September 19, 2013 - Posted by | Finance | , , , , ,

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