23rd November 2017
LONDON STOCK EXCHANGE, LONDON
Financing the Stone: Capital Markets, Banks or Fintech?
This forum explored whether the world of diamonds is heading into the grip of a midstream credit squeeze, or towards the leading edge of alternative financing models.
In light of tougher bank capital requirements, and some banks' withdrawal from financing the diamond industry's midstream, an estimated $3-4 billion credit gap is likely to emerge in the sector by 2020. Companies and investors are asking themselves what impact this may have on the supply and price of diamonds, and how replacement finance can be accessed from new and innovative sources.
Topics covered included:
- The supply and demand outlook on diamonds, including 'synthetics', and the impact on price?
- Why are traditional banks leaving the sector? Regulation, risk, industry size, high transaction cost?
- What replacement options exist?
- What will be the demands of new capital providers?
- How could fintech and blockchain change the rules of the game?
- Is the current diamond midstream bankable?
- Do miners and retailers have a responsibility to make the midstream more bankable?
- What business behaviours must the midstream adopt to attract new finance?
- What are the key risks for new sources of finance to the industry? What are the opportunities? Why lend at all to the industry?
- How will the financing squeeze in the midstream affect the supply and price of diamonds?
- Are big banks going to come back to the diamond sector or leave it to specialised financiers?
- Why does it matter if financing is not available, and to whom?