Zopa

I'm fascinated by Zopa, a kind of DIY bank, which Michael showed me today. My first reaction was that it was a dream venue for loan sharks, money launderers and con artists. But conversely, I considered all the times I'd groused about the 5 day float banks get on checks over $2,000, and the 30 days it takes to clear a US check at a Canadian bank, and thought perhaps this was just what I needed.

Right now it is only open to UK residents, and lenders are limited to loaning 25,000 pounds. Loans are distributed among 50 borrowers, to mitigate the risk. I don't know if this would fly in the US, or if banks are regulated differently here. But 1% up front, and a commission for the sale of insurance seems as good as a license to print money if they can get to scale. And I'd be interested to hear from some PayPal execs on their perspective on the risk of fraud. Here's a BBC Article as well as an article in MyFinance.co.uk.

I'll keep an eye on this one, it might be huge. It's backed by Benchmark.