banking

By Megan Murphy, Justin Baer, Francesco Guerrera, Patrick Jenkins, Jeremy Grant, Martin Arnold and Sam Jones

 By Jamil Anderlini in Beijing

Scott Langmack has given more than US$600,000 in unsecured loans to strangers.

"I can reliably get 12 per cent, worst case 9 per cent," said Mr Langmack, 50, a former Microsoft marketing executive who began investing in so-called peer-to-peer lending last year. "I can't find anything that gives me this kind of confidence."

A few months ago I rashly went on the record as saying that one of the benefits of the financial crisis was that in future investment banks would have much improved risk management functions. And I believed it.

Even now, looking back on it, it still makes sense. There was a clear disconnect not only between the rocket scientists on the trading desks who were taking on risk for their firms and the risk managers who were supposed to be supervising them, but in turn between risk management and the boards of some of the largest firms.

Deposit rates in Hong Kong have fallen to a remarkable 0.01 per cent, and one bank has even brought it down to 0.001 per cent. This is really as close to zero as you can get. Frustrating, right?