The Business Models and Economics of Peer-to-Peer lending. ECRI Research Report No 17, May 2016

This paper reviews peer-to-peer (P2P) lending, its development in the UK and other countries, and assesses the business and economic policy issues surrounding this new form of intermediation. P2P platform technology allows direct matching of borrowers’ and lenders’ diversification over a large number of borrowers without the loans having to be held on an intermediary balance sheet. P2P lending has developed rapidly in both the US and the UK, but it still represents a small fraction, less than 1%, of the stock of bank lending. In the UK – but not elsewhere – it is an important source of loans for smaller companies. We argue that P2P lending is fundamentally complementary to, and not competitive with, conventional banking. We therefore expect banks to adapt to the emergence of P2P lending, either by cooperating closely with third-party P2P lending platforms or offering their own proprietary platforms. We also argue that the full development of the sector requires much further work addressing the risks and business and regulatory issues in P2P lending, including risk communication, orderly resolution of platform failure, control of liquidity risks and minimisation of fraud, security and operational risks. This will depend on developing reliable business processes, the promotion to the full extent possible of transparency and standardisation and appropriate regulation that serves the needs of customers.

Achieving European Policy Objectives through Financial Technology. ECRI Commentary No. 17, 16 November 2015

Alistair Milne argues in this ECRI Commentary that ‘FinTech’ (newly emerging Financial Technologies) can play a crucial role in achieving European policy objectives in the area of financial markets. These notably include increasing access by smaller firms to trade credit and other forms of external finance and completing the banking and capital markets unions. He points out, however, that accomplishing these objectives will require a coordinated European policy response, focused especially on promoting common business processes and the adoption of shared technology and data standards.

Pure Business, Law Enforcement or Sheer Politics? The EU’s WTO Complaints against Chinese Export Restrictions on Raw Materials. EU Diplomacy Paper 06/2013

In light of the growing international competition among states and globally operating companies for limited natural resources, export restrictions on raw materials have become a popular means for governments to strive for various goals, including industrial development, natural resource conservation and environmental protection. For instance, China as a major supplier of many raw materials has been using its powerful position to both economic and political ends. The European Union (EU), alongside economic heavyweights such as the US, Japan and Mexico, launched two high-profile cases against such export restrictions by China at the WTO in 2009 and 2012. Against this background, this paper analyses the EU’s motivations in the initiation of trade disputes on export restrictions at WTO, particularly focusing on the two cases with China. It argues that the EU's WTO complaints against export restrictions on raw materials are to a large extent motivated by its economic and systemic interests rather than political interests. The EU is more likely to launch a WTO complaint, the stronger the potential and actual impact on its economy, the more ambiguous the WTO rules and the stronger the internal or external lobbying by member states or companies. This argumentation is based on the analysis of pertinent factors such as the economic impact, the ambiguity of WTO law on export restrictions and the pressure by individual member states on the EU as well as the role of joint complaints at the WTO and political considerations influencing the EU’s decision-making process.

Unity stronger than divisions. Ukraine's internal diversity. OSW Point of View Number 40, March 2014

Ukraine is deeply divided internally, although as a result of the changes that have taken place since its independence, the country’s internal divisions now have less and less to do with territorial divides, and the split into historical ‘sub-Ukraines’ has become less pronounced, especially for the younger generation. Ukraine is not a country of two competing regional identities, one in the west, the other in the east. The western identity, in which the unity of Ukraine is a key value, coexists with the multiple and diverse local patriotisms of the different regions in the east and the south of the country. The present protest movement has consolidated the country’s sense of unity. Its opponents have also been championing the indivisibility of Ukraine, even while they demanded a thorough decentralisation of the country, which was often mistaken for separatism. Russia has been stirring up separatist tendencies in Ukraine, but with little success. Crimea is an exception here, because in most respects it has remained unaffected by the dynamics of the social processes transforming mainland Ukraine – separatist tendencies are indeed deeply rooted in the peninsula.

European Integration and Europeanisation: Benefits and Disadvantages for Business. Bruges European Economic Policy (BEEP) Briefing 29/2013

European integration is a project of great economic importance for the 500 million consumers and 21 million companies in Europe. With the economic borders between Member States removed, Europeanisation becomes inevitable for companies. The paper proposes a framework to analyse the benefits and disadvantages for business that come with the process of European integration, structured according to the logic of the four fundamental freedoms of movement within the Internal Market (freedom of movement of goods, services, capital and people) complemented by the section on technology and innovation, and the general EU regulatory environment. Whereas the business decisions need to be taken on a case-by-case basis, taking into consideration firm’s own capabilities and resources as well as industry specificities, several recommendations for companies willing to Europeanise are made, based on an analysis of the regulatory macro-environment of the EU. Above all, any company willing to be successful in the EU has to become a learning organisation, responsive to the advancements of the macro-environment. The ability to anticipate the regulatory developments and to adjust one’s own business and corporate strategy accordingly is the key to achieving sustainable competitive advantage in the European Union.

Unfinished business: the governance of the Economic and Monetary Union. Compendium of EPC publications on the future of the Euro

Europe is once again engulfed in crisis. The sheer scale of refugees coming daily is not only a major challenge for the transit and destination countries, it is also exposing distrust between member states (and vis-à-vis the EU institutions). It has also shown that there is an unwillingness to cooperate and compromise within the EU system, in part a collateral damage of the eurocrisis. With a continuing sluggish economy and high unemployment, external challenges such as the conflict in Ukraine and internal ones like the referendum on EU membership in the UK, the EMU crisis looks less urgent at this point, with an agreement with Greece preventing the disastrous consequences of a Grexit, at least for now.