The story is resonating. Peer to peer received a welcome boost recently when Andy Haldane, policy head at the Bank of England, suggested it could replace a substantial part of the retail banking sector. But why has the world of peer to peer only flourished in the past few years? Peer to peer isn’t just a nice idea; it has needed economic conditions to boost it into a sustainable industry. Indeed the answer lies in the macro economy rather more than people would like to think. As the competitive world of retail banking faltered in the aftermath of the banking crisis, bank “spreads” widened: the APRs and AERs that a bank directly offered widened to such a degree that they have created a marketplace for peer to peer to thrive. This sea change in the world of retail finance has allowed peer to peer to establish credible models, and – with operators already demonstrating long term viability – it may be difficult for traditional finance to get the genie back in the bottle.