The Occupy movement has gone global (Image: Vastdock Id Images)

The first and final paragraphs of this article have been changed because information they contained was inaccurate.

Editorial: “Can citizen banking neuter the fat cats?“

Traditional banks have failed us. Will online peer-to-peer lending rescue our personal finances?

IMAGINE YOURSELF in the following scenario. You’ve painstakingly saved up the money for a down payment on your first home. The process looks straightforward: a bank has pre-approved your mortgage. There’s an odd clause that stipulates that if no bank will approve your loan, you will lose your down payment completely. But you’re not worried. You have an impeccable credit history. You sign the dotted line.

But then the recessions hit and the rules change. Unless you double your down payment, no bank will approve you. Suddenly, your life savings are on the line. You have no choice but to cobble together the rest from credit cards despite incurring exorbitant interest. You will probably borrow money from friends. You might even take a second job.

Even if you manage to get the mortgage, however, you’ll pay a steep price. Your credit rating will be tarnished. Try to consolidate your new debts into a better loan, and you’ll soon find out that banks consider you radioactive.

For a great many people, this is not speculative fiction but grim reality, and stories such as these are fuelling the fires of the Occupy Wall Street movement.

Banks – supposedly dependable matchmakers that connect people with money to spend to people who need to borrow it – have stopped holding up their end of the bargain. …