I think there is responsibility here on both sides.
An individual should take responsibility for his own finances and know what he can and cannot afford. It is irresponsible for an individual to lay all the blame on the bank that lent him the money.
However the banks are not blameless and their procedures for lending in the future should be more stringent which is completely the opposite of Government policy at the moment by the way. The banks should only lend unsecured money where people have a reasonable chance of paying it back based on their assets and income.
Banks also need to look at their secured lending such as mortgages. They have played a large role in fueling inflated house prices.
All in all both sides should act more responsibly in the future but i doubt it will happen.
A measure of blame lies with both but principally with the consumer who has only himself to blame for any personal debt!!!!!
Of course the financial organisations are keen to lend us money, after all that is how the world survives, whether we as individuals sell our labour in exchange for a salary or as a shopkeeper selling our wares, we all have to budget within our earnings range. Nobody forces people into debt, rather it is our greedy "Must have it now and to h**l with budgeting" attitude that is to blame.
The UK National Economy is now in a sorry state thanks mainly to the actions of many large Financial Institutions and as a result many individuals are also suffering. Salutary lessons should have been learned in the past year or so but I fear this is not the case. Witness the latest report on Goldman Sachs which was recently bailed out by the US Government (Taxpayer) to the tune of almost $9 billion, GS then posted a huge loss for the last financial period and has now announced that it will be paying out about $6 billion as a bonus to staff.
I am aware that you cannot always believe everything reported in the Press but if this report is even half correct then it beggars belief. If I were the US Government I'd be reserving some places for the GS Board members in Guantanamo Bay and demanding full and immediate repayment of the bailout money.
Reading back over this response I realise I have been rather lenient... We should stand all these greedy financial b******s up against a wall and shoot them.
we are not all forced to take out big loans or open numerous credit cards that we cannot afford, then again the banks don't warn us about the possible consequences. still we are the ones that put pen to paper in the end.
I have a wealth of experience in the debt industry and there is absolutely no question whatsoever that creditor companies desperate to bolster already immense profits have repeatedly exploited their position by cajoling, coersing and pressuring often naiaive and vulnerable people into overcommiting themselves financially.
Repeatedly increasing the credit limit on cards without consultation or consent is just one example, but there are hundreds. A greed fuelled lending frenzy clouding "Shark practices" including illegal charges and the miss-selling of payment protection insurance are but two examples of these and again there are hundreds.
Ask youself how many times you have been offered credit in a store when the idea had previously not entered your head? How many offers of credit cards, loans and other forms of finance have fallen unsolicited on your doormat? How many times have you been approached at a motorway service station by credit card sales people?
If you are like most of us you will be able to think of numerous examples of each. Now ask yourself, does this indicate a responsible lending approach or an industry bent on exploiting every opportunity to maximise profit? So who deserves more sympathy???
I feel that people have been going around with their eyes shut. I suggest they watch Joseph and the Amazing Technicolour Dream or read the story. Seven years feast seven years of famine. It didn't take me long to work out that things couldn't go on the way they were and it amazes me that all these people with the so called 'super brains' couldn't see it, when I, with very few qualifications but plenty of common sense could see what was happening. I think a lot of it was I am alright Jack and blow everyone else. Sadly this is the world that Maggie Thatcher introduced to us. We have been rock bottom, but we cut our cloth according to our means, and although it was tough, and we did without holidays for 13 years, and then it was only back to Scotland, we were at peace and didn't worry to the same extent that people who have had so called fab holidays and fab homes, are sadly now paying the price. I used to say to my husband, where am I going wrong with the finances, when Joe Bloggs can go to America, buy a new car, or get a bigger house, now I know they were lliving on tick.
Gordon Brown bragged for years how interest rates were so low and no more boom and bust. I believe he has caused the debt mountain with encouraging people to borrow more than they can afford at a time when interest rate were low then when inflation started to rise and interest rates rose to try and curb inflation they could no longer afford their mortgages and other debt incurred. This government is the worst in living history and all Gordon Brown can say is that is a world wide problem and will not acept any responcibility for any of the problems that the country is facing and he caused.
Could you add govt/regulators as an option? If anything has failed, it is the financial regulators, and the government bodies that ought to do their job: regulating and governing the financial bodies such as banks!
To me this is akin to a government turning a blind eye when everyone on the street is taking drugs and thinking they are happy and fine. It just so happens that we are all aware of the perils of drug use, but obviously not so aware of the perils of wanton credit availability.
Since the party coffers, and the voters lined up, no one wanted to call on how reckless the credit market (wholesale and retail) has been.
The very least the government should do now is to bring those to task. And also please not explain everything away with "The Americans are doing it this way too."!
The banks have been at fault by 'loaning' money to those who they ought to have seen would never be able to pay it back. Those of us who are careful with money now have to contribute (through higher cahrges and poorer interest rates) towards those bad decisions.
A short while ago a TV News Channel reported that the Lebanese Banks are riding the Crest of a Wave and have no need to borrow Finance to keep afloat like other major nations in the world. The Banking Chief gave an interview and stated that he foresaw this overproduction/recession, so called credit crunch,and lack of liquidity in liquid Funds in May 2007 and gave instructions/orders to all the Lebanese Banking chiefs to get rid of all Foreign Loans, recall all their Funds in Foreign Countries and they must keep at least 30% cash in liquid form at all times.In other words prudent business,not quite so much profit but intelligent forecasting.We know the American President and his entourage are lame ducks but what about our Labour Prime Minister, Labour Cabinet and so called highly paid Labour advisers and there is a lot of them? They all think they are the so called "Cream" - they are very highly paid,given vast amounts of Pensions,free perks,long holidays,and to be honest all of them can't run a p*** up against a brick wall.All we get are apologies which quite frankly are false- we should be given resignations, sackings, loss of Bonuses and people appointed who can do the job and put the people of this country first!. The Queen got it right when she said "Why didn't anybody see it coming?" The politicions have killed this country and have individually made a fortune without being accountable for anything. No wonder everybody is feeling miserable at the moment especially the Pensioners who have paid all their taxes and dues since they started working a long time ago. Our Prime Minister says our troops are coming out of Iraq in 2009 I wonder if they will be based in UK, if so I also wonder if they are being brought back to protect the Government, do I detect a thought/seeds of a Revolution/Peoples Revolt coming???
The financial institutions have a great responsibility for bad and irresponsible lending which has landed us in this treacherous state on the basis of the projected value of properties.
Individuals have a greater responsibility of not borrowing more than they can afford to repay and it was criminal for banks to lend to customers on self certification basis without checking the facts.
Even greater culpability are the regulators and the auditors of banks who sign of these accounts of banks not judging the risk analysis or understanding the fundamentals such as the fallout of Bernard Madoff of the recent Ponzi scheme in USA.
Banks should be engaged in the fundamentals of banking from now on and not risk customers life savings and assets to give themselves fat bonuses. Bonuses must only be paid when the results are proven and not before that.
The responsibility should definitely rest with the individual, although the banks etc should be forced to have a more responsible approach to lending, and possibly in helping to get the consumer better versed in how to handle their finances.
I work for a credit card company, and the number of customers who freely admit to not reading the terms and conditions is scary. If you're signing up for anything financial then you should make sure you are aware of the implications of what you are signing up for, and asking for things to be explained clearly if you need them to be.
The blame clearly lies in three quarters us, the banks and the government, with the bankers being the most culpable. Clearly bank regulation hasn't worked which can only be placed at the feet of various governments and the weakness of our government in bringing the senior bank directors to book is woefully inadequate since the directors of organisations such as HBOS & B&B should be disbared from further directorships and forced to reliquish previous year's bonus payments to the public coffers. In future irresponsibility of this nature should be punished by the removal of limited liability from such directors. HMG however is not blameless since it allowed the housing market to overheat and fuel the greed of house buyers who did not have the nous to realise that the situation was unsustainable. For the future the B of E should be allowed to set varying minimum lending rates for different sectors of the economy and where these are not working they should be given the power to ration lending.
3 Entered contracts to build hospitals at more than 3 times the standrd cost
4 Allowed Private Sector Pensions to be taxed out of existance whilst the cost Public Sector Pensions run out of control for us poor tax payers
The man has know experience of the real World and could not run a P--- up in a brewery as aresult the British Econmy and our standard of living compared with the rest of Europe will take a steep nosedive that we will NEVER recover from that is Blair and Browns heritage
I know it isn't fashionable to believe this in this loony-lefty-run country, but we are responsible for our own actions.
Most people in debt, have been in debt for years, long before the 'credit crunch' hit and it is wholy due to their stupidity. Afterall, what kind of person applies for a Credit card or Store card, doesn't bother to read the 'small print' (which states, by law, the annual interest rate) and spends on the card as if it's going out of fashion? Only an idiot does.
Together with the greed of the banks and the dimwitted-nature of millions of the public, this country will be saddled with one of the worst recessions in history and the loss of several-hundred-thousand jobs. What a country.
We have all got too greedy! What's wrong with saving up to buy something instead of wanting everything immediately! We are all living on too much borrowed money!
People cannot stick their heads in the sand and forget about the money they have borrowed. The government have tried to help one group of people who owe money by reducing the Interest rates, hoping they will spend this extra money they have in the shops, instead they seem to be paying more towards their mortage. While the seven times as many savers that would have continued spending the interest they earned on their savings will not spend because their income has been cut. Now please tell me where is the sence in that?
People cannot stick their heads in the sand and forget about the money they have borrowed. The government have tried to help one group of people who owe money by reducing the Interest rates, hoping they will spend this extra money they have in the shops, instead they seem to be paying more towards their mortage. While the seven times as many savers that would have continued spending the interest they earned on their savings will not spend because their income has been cut. Now please tell me where is the sence in that?
People cannot stick their heads in the sand and forget about the money they have borrowed. The government have tried to help one group of people who owe money by reducing the Interest rates, hoping they will spend this extra money they have in the shops, instead they seem to be paying more towards their mortage. While the seven times as many savers that would have continued spending the interest they earned on their savings will not spend because their income has been cut. Now please tell me where is the sence in that?
People cannot stick their heads in the sand and forget about the money they have borrowed. The government have tried to help one group of people who owe money by reducing the Interest rates, hoping they will spend this extra money they have in the shops, instead they seem to be paying more towards their mortage. While the seven times as many savers that would have continued spending the interest they earned on their savings will not spend because their income has been cut. Now please tell me where is the sence in that?
People cannot stick their heads in the sand and forget about the money they have borrowed. The government have tried to help one group of people who owe money by reducing the Interest rates, hoping they will spend this extra money they have in the shops, instead they seem to be paying more towards their mortage. While the seven times as many savers that would have continued spending the interest they earned on their savings will not spend because their income has been cut. Now please tell me where is the sence in that?
The original question being "who is to blame for UK personal debt mountain?" You have to apportion blame to both sides. As already stated, an individual has to take responsibility to ensure that he/she can afford the borrowing in the first palce and to also safegaurd themselves should their circumstances change (sick or redundancy). However the banks have been more than happy to lend to high risk customers and knew full well of the risk involved. It is now that this high risk lending has bitten them in the ass and we all seem to be suffering as a result. We are bailing out banks using public money which is again only going to end up costing us more in the long run through taxes as well as the already low interest rates we are getting on savings. I wouldn't mind the low rates if these were recipricated down in the mortgage market too. It seems that what is given with one hand the banks take with the other so what's the point of cutting rates?
Just this years bonuses...? I think the assets of the 5-10% of bankers who have caused this with wreckless practice designed to line their own pockets, should be confiscated by the state.
I am sure that there are records to identify those individuals.
The globalisation genie has been let out and unless there is concerted global regulation and control there will be no way to control the market forces that determine ridiculous levels of reward.
US
I think there is responsibility here on both sides.
An individual should take responsibility for his own finances and know what he can and cannot afford. It is irresponsible for an individual to lay all the blame on the bank that lent him the money.
However the banks are not blameless and their procedures for lending in the future should be more stringent which is completely the opposite of Government policy at the moment by the way. The banks should only lend unsecured money where people have a reasonable chance of paying it back based on their assets and income.
Banks also need to look at their secured lending such as mortgages. They have played a large role in fueling inflated house prices.
All in all both sides should act more responsibly in the future but i doubt it will happen.
A measure of blame lies with both but principally with the consumer who has only himself to blame for any personal debt!!!!!
Of course the financial organisations are keen to lend us money, after all that is how the world survives, whether we as individuals sell our labour in exchange for a salary or as a shopkeeper selling our wares, we all have to budget within our earnings range. Nobody forces people into debt, rather it is our greedy "Must have it now and to h**l with budgeting" attitude that is to blame.
The UK National Economy is now in a sorry state thanks mainly to the actions of many large Financial Institutions and as a result many individuals are also suffering. Salutary lessons should have been learned in the past year or so but I fear this is not the case. Witness the latest report on Goldman Sachs which was recently bailed out by the US Government (Taxpayer) to the tune of almost $9 billion, GS then posted a huge loss for the last financial period and has now announced that it will be paying out about $6 billion as a bonus to staff.
I am aware that you cannot always believe everything reported in the Press but if this report is even half correct then it beggars belief. If I were the US Government I'd be reserving some places for the GS Board members in Guantanamo Bay and demanding full and immediate repayment of the bailout money.
Reading back over this response I realise I have been rather lenient... We should stand all these greedy financial b******s up against a wall and shoot them.
Regards,
Schemin Demon
we are not all forced to take out big loans or open numerous credit cards that we cannot afford, then again the banks don't warn us about the possible consequences. still we are the ones that put pen to paper in the end.
I have a wealth of experience in the debt industry and there is absolutely no question whatsoever that creditor companies desperate to bolster already immense profits have repeatedly exploited their position by cajoling, coersing and pressuring often naiaive and vulnerable people into overcommiting themselves financially.
Repeatedly increasing the credit limit on cards without consultation or consent is just one example, but there are hundreds. A greed fuelled lending frenzy clouding "Shark practices" including illegal charges and the miss-selling of payment protection insurance are but two examples of these and again there are hundreds.
Ask youself how many times you have been offered credit in a store when the idea had previously not entered your head? How many offers of credit cards, loans and other forms of finance have fallen unsolicited on your doormat? How many times have you been approached at a motorway service station by credit card sales people?
If you are like most of us you will be able to think of numerous examples of each. Now ask yourself, does this indicate a responsible lending approach or an industry bent on exploiting every opportunity to maximise profit? So who deserves more sympathy???
Definitely the consumer - 'personal' debt!
I feel that people have been going around with their eyes shut. I suggest they watch Joseph and the Amazing Technicolour Dream or read the story. Seven years feast seven years of famine. It didn't take me long to work out that things couldn't go on the way they were and it amazes me that all these people with the so called 'super brains' couldn't see it, when I, with very few qualifications but plenty of common sense could see what was happening. I think a lot of it was I am alright Jack and blow everyone else. Sadly this is the world that Maggie Thatcher introduced to us. We have been rock bottom, but we cut our cloth according to our means, and although it was tough, and we did without holidays for 13 years, and then it was only back to Scotland, we were at peace and didn't worry to the same extent that people who have had so called fab holidays and fab homes, are sadly now paying the price. I used to say to my husband, where am I going wrong with the finances, when Joe Bloggs can go to America, buy a new car, or get a bigger house, now I know they were lliving on tick.
Gordon Brown bragged for years how interest rates were so low and no more boom and bust. I believe he has caused the debt mountain with encouraging people to borrow more than they can afford at a time when interest rate were low then when inflation started to rise and interest rates rose to try and curb inflation they could no longer afford their mortgages and other debt incurred. This government is the worst in living history and all Gordon Brown can say is that is a world wide problem and will not acept any responcibility for any of the problems that the country is facing and he caused.
Could you add govt/regulators as an option? If anything has failed, it is the financial regulators, and the government bodies that ought to do their job: regulating and governing the financial bodies such as banks!
To me this is akin to a government turning a blind eye when everyone on the street is taking drugs and thinking they are happy and fine. It just so happens that we are all aware of the perils of drug use, but obviously not so aware of the perils of wanton credit availability.
Since the party coffers, and the voters lined up, no one wanted to call on how reckless the credit market (wholesale and retail) has been.
The very least the government should do now is to bring those to task. And also please not explain everything away with "The Americans are doing it this way too."!
US.
We should all be responsible for our own actions.
The banks have been at fault by 'loaning' money to those who they ought to have seen would never be able to pay it back. Those of us who are careful with money now have to contribute (through higher cahrges and poorer interest rates) towards those bad decisions.
A short while ago a TV News Channel reported that the Lebanese Banks are riding the Crest of a Wave and have no need to borrow Finance to keep afloat like other major nations in the world. The Banking Chief gave an interview and stated that he foresaw this overproduction/recession, so called credit crunch,and lack of liquidity in liquid Funds in May 2007 and gave instructions/orders to all the Lebanese Banking chiefs to get rid of all Foreign Loans, recall all their Funds in Foreign Countries and they must keep at least 30% cash in liquid form at all times.In other words prudent business,not quite so much profit but intelligent forecasting.We know the American President and his entourage are lame ducks but what about our Labour Prime Minister, Labour Cabinet and so called highly paid Labour advisers and there is a lot of them? They all think they are the so called "Cream" - they are very highly paid,given vast amounts of Pensions,free perks,long holidays,and to be honest all of them can't run a p*** up against a brick wall.All we get are apologies which quite frankly are false- we should be given resignations, sackings, loss of Bonuses and people appointed who can do the job and put the people of this country first!. The Queen got it right when she said "Why didn't anybody see it coming?" The politicions have killed this country and have individually made a fortune without being accountable for anything. No wonder everybody is feeling miserable at the moment especially the Pensioners who have paid all their taxes and dues since they started working a long time ago. Our Prime Minister says our troops are coming out of Iraq in 2009 I wonder if they will be based in UK, if so I also wonder if they are being brought back to protect the Government, do I detect a thought/seeds of a Revolution/Peoples Revolt coming???
The financial institutions have a great responsibility for bad and irresponsible lending which has landed us in this treacherous state on the basis of the projected value of properties.
Individuals have a greater responsibility of not borrowing more than they can afford to repay and it was criminal for banks to lend to customers on self certification basis without checking the facts.
Even greater culpability are the regulators and the auditors of banks who sign of these accounts of banks not judging the risk analysis or understanding the fundamentals such as the fallout of Bernard Madoff of the recent Ponzi scheme in USA.
Banks should be engaged in the fundamentals of banking from now on and not risk customers life savings and assets to give themselves fat bonuses. Bonuses must only be paid when the results are proven and not before that.
The banks have to take a high proportion of the blame.
There is a very usefull word in the english language that has been in use for many years, and that is NO!
The responsibility should definitely rest with the individual, although the banks etc should be forced to have a more responsible approach to lending, and possibly in helping to get the consumer better versed in how to handle their finances.
I work for a credit card company, and the number of customers who freely admit to not reading the terms and conditions is scary. If you're signing up for anything financial then you should make sure you are aware of the implications of what you are signing up for, and asking for things to be explained clearly if you need them to be.
The blame clearly lies in three quarters us, the banks and the government, with the bankers being the most culpable. Clearly bank regulation hasn't worked which can only be placed at the feet of various governments and the weakness of our government in bringing the senior bank directors to book is woefully inadequate since the directors of organisations such as HBOS & B&B should be disbared from further directorships and forced to reliquish previous year's bonus payments to the public coffers. In future irresponsibility of this nature should be punished by the removal of limited liability from such directors. HMG however is not blameless since it allowed the housing market to overheat and fuel the greed of house buyers who did not have the nous to realise that the situation was unsustainable. For the future the B of E should be allowed to set varying minimum lending rates for different sectors of the economy and where these are not working they should be given the power to ration lending.
Also rememeber Mr Prudent Brown
1 Sold gold at an all time low
2 Run up record National Debt
3 Entered contracts to build hospitals at more than 3 times the standrd cost
4 Allowed Private Sector Pensions to be taxed out of existance whilst the cost Public Sector Pensions run out of control for us poor tax payers
The man has know experience of the real World and could not run a P--- up in a brewery as aresult the British Econmy and our standard of living compared with the rest of Europe will take a steep nosedive that we will NEVER recover from that is Blair and Browns heritage
I know it isn't fashionable to believe this in this loony-lefty-run country, but we are responsible for our own actions.
Most people in debt, have been in debt for years, long before the 'credit crunch' hit and it is wholy due to their stupidity. Afterall, what kind of person applies for a Credit card or Store card, doesn't bother to read the 'small print' (which states, by law, the annual interest rate) and spends on the card as if it's going out of fashion? Only an idiot does.
Together with the greed of the banks and the dimwitted-nature of millions of the public, this country will be saddled with one of the worst recessions in history and the loss of several-hundred-thousand jobs. What a country.
We have all got too greedy! What's wrong with saving up to buy something instead of wanting everything immediately! We are all living on too much borrowed money!
People cannot stick their heads in the sand and forget about the money they have borrowed. The government have tried to help one group of people who owe money by reducing the Interest rates, hoping they will spend this extra money they have in the shops, instead they seem to be paying more towards their mortage. While the seven times as many savers that would have continued spending the interest they earned on their savings will not spend because their income has been cut. Now please tell me where is the sence in that?
People cannot stick their heads in the sand and forget about the money they have borrowed. The government have tried to help one group of people who owe money by reducing the Interest rates, hoping they will spend this extra money they have in the shops, instead they seem to be paying more towards their mortage. While the seven times as many savers that would have continued spending the interest they earned on their savings will not spend because their income has been cut. Now please tell me where is the sence in that?
People cannot stick their heads in the sand and forget about the money they have borrowed. The government have tried to help one group of people who owe money by reducing the Interest rates, hoping they will spend this extra money they have in the shops, instead they seem to be paying more towards their mortage. While the seven times as many savers that would have continued spending the interest they earned on their savings will not spend because their income has been cut. Now please tell me where is the sence in that?
People cannot stick their heads in the sand and forget about the money they have borrowed. The government have tried to help one group of people who owe money by reducing the Interest rates, hoping they will spend this extra money they have in the shops, instead they seem to be paying more towards their mortage. While the seven times as many savers that would have continued spending the interest they earned on their savings will not spend because their income has been cut. Now please tell me where is the sence in that?
People cannot stick their heads in the sand and forget about the money they have borrowed. The government have tried to help one group of people who owe money by reducing the Interest rates, hoping they will spend this extra money they have in the shops, instead they seem to be paying more towards their mortage. While the seven times as many savers that would have continued spending the interest they earned on their savings will not spend because their income has been cut. Now please tell me where is the sence in that?
The original question being "who is to blame for UK personal debt mountain?" You have to apportion blame to both sides. As already stated, an individual has to take responsibility to ensure that he/she can afford the borrowing in the first palce and to also safegaurd themselves should their circumstances change (sick or redundancy). However the banks have been more than happy to lend to high risk customers and knew full well of the risk involved. It is now that this high risk lending has bitten them in the ass and we all seem to be suffering as a result. We are bailing out banks using public money which is again only going to end up costing us more in the long run through taxes as well as the already low interest rates we are getting on savings. I wouldn't mind the low rates if these were recipricated down in the mortgage market too. It seems that what is given with one hand the banks take with the other so what's the point of cutting rates?
Just this years bonuses...? I think the assets of the 5-10% of bankers who have caused this with wreckless practice designed to line their own pockets, should be confiscated by the state.
I am sure that there are records to identify those individuals.
The globalisation genie has been let out and unless there is concerted global regulation and control there will be no way to control the market forces that determine ridiculous levels of reward.