UBS Fraud Case

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Nick Moules
21st November 2012

At rebuildingsociety.com we believe in productivity over speculation. That means we believe money can be used effectively in the economy to create wealth for those who deserve it, rather than speculated by investment bankers with the profits siphoned off to the Cayman Islands, or big employers brought to the brink of collapse when it goes wrong.

The recent case of Kweku Adoboli, the trader jailed for nearly destroying UBS by burying his losses using false accounting, will be remembered as a landmark case in the same way Nick Leeson and Jerome Kerviel are.

Imagine if the £1.4bn Adoboli lost for UBS had been lent to profitable businesses with a history of good business practice and a desire to grow and create jobs?

The bank would still have made a profit and those employed by the borrowers would have more cash to put in a bank and keep the cycle going.

Unfortunately for the banks, people are uncomfortable with their cash going into a machine that allows for risky trading, especially when the returns are so poor in savings accounts.

So, peer-to-business lending steps in and joins both parties together. It has elements of mutuality to its structure, but with a promotional benefit that the internet brings.

It helps people gain above inflation returns on their cash (which savings just can’t offer at the moment) from profitable businesses and borrowers get exposure to hundreds of would-be customers and capital raised by individuals without the constraints of a factoring facility of invoice financing.

The next time you’re thinking about putting your cash in a bank, remember there is usually a better use for it that benefits everyone.

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