To lend or not to lend

What's the alternative?

In the near term, there isn't one. As I stated above, the genie is out. The genie has a lifespan, but we don't know what it is. Will the non-bank lenders fade away entirely? No, but they will change. Will the banks, in particular the Big Four, regain ascendency? Again, unlikely, because at the end of the day, despite the differential in fund resourcing between bank and non-bank lenders, all lending institutions borrow short term money to fund their dealings. It's only the depth that varies.

The market will recover and find a new level. Money won't be as cheap, but the drive for market share will remain as strong. Why? Shareholders and profit.

I believe you'll find the banks will regain some share due to skittishness from borrowers in general, but both bank and non-bank lenders will remain sales driven, and to me, that is where the industry fails to recognise the social good it has the capacity to deliver. Profits can still be had and risk be made acceptable, prudential, but sales volumes and the drive to achieve greater and greater targets which bear little or no relation to achievable levels, seriously need to be tempered by risk and prudentiality.

The real target, the real challenge for the finance industry in this country is achievement of balance between risk and prudentiality, and market share and profits. I'm punting that the latter, in the near term, will win out. Greed works!