LendingClub Shares Soar as Site Goes Public

The video discusses the evolution of peer-to-peer lending, highlighting its shift from individual to institutional investors. It explores the impact on traditional banking, with insights from industry leaders like John Mack. The discussion covers unique business models, risk management, and investor concerns, emphasizing the importance of market stability and diversification. The potential for peer-to-peer lending to disrupt traditional banking is examined, along with future developments in the industry.

What is one of the most exciting developments in peer-to-peer lending over the last 18 months?

• The rise of traditional banks

• The institutionalization of the market

• The decline of retail investors

• The decrease in loan opportunities

What is a key feature of Lending Club's business model?

• It functions as a marketplace

• It holds all the balance sheet risk

• It operates as a traditional bank

• It only serves high-quality borrowers

How does Lending Club manage the risk of defaults?

• By only lending to high-quality borrowers

• By holding all loans on its balance sheet

• By diversifying funding sources

• By avoiding any form of risk assessment

What is a concern for investors regarding peer-to-peer lending?

• The stability of traditional banks

• The lack of institutional involvement

• The potential for increased defaults

• The high quality of borrowers

What is a potential impact of peer-to-peer lending on traditional banks?

• It will eliminate the need for banks

• It will create new opportunities for banks to acquire lending platforms

• It will force banks to increase interest rates

• It will reduce the number of loans available

What is ironic about banks buying through peer-to-peer marketplaces?

• Banks are not allowed to participate in these marketplaces

• Banks have no interest in peer-to-peer lending

• Banks initially stepped away from lending to small businesses

• Banks have always been the primary lenders

What is the estimated annual opportunity in the small business segment for peer-to-peer lending?

• $200 billion

• $100 billion

• $50 billion

• $140 billion