Why Do Banks Get All The Blame?

AliceJenkins

I'm not going to be the most popular person posting this but here goes...

Why is is that all we hear is everything's the banks fault and "the rich".

The financial crisis was caused by people borrowing what they couldn't afford to pay back. Of course the banks have some responsibility, but surely a much larger responsibly lays with those who borrowed more than they could afford to pay back?

Should the banks ever be responsible for nannying everyones finance, surely the buck stops with those who borrowed?

Then we move onto blaming the 'rich' who pay more tax than anyone in a £ amount yet use less services and get less back(private healthcare etc).

Opinions?

Jimmy_31

AliceJenkins wrote: »

I'm not going to be the most popular person posting this but here goes...

Why is is that all we hear is everything's the banks fault and "the rich".

The financial crisis was caused by people borrowing what they couldn't afford to pay back. Of course the banks have some responsibility, but surely a much larger responsibly lays with those who borrowed more than they could afford to pay back?

Should the banks ever be responsible for nannying everyones finance, surely the buck stops with those who borrowed?

Then we move onto blaming the 'rich' who pay more tax than anyone in a £ amount yet use less services and get less back(private healthcare etc).

Opinions?

The blame lies with the government, banks, mugs who took the money to pay a stupid price for a house.

daveyjp

Sorry OP but you are wrong. People can only borrow what they are offered. Ask yourself why can't anyone get a 110% mortgage anymore? Is it because people don't want them or because they aren't available? Banks control supply, not borrowers.

nearlynew

http://wearethe99percent.tumblr.com/

AliceJenkins

daveyjp wrote: »

Sorry OP but you are wrong. People can only borrow what they are offered. Ask yourself why can't anyone get a 110% mortgage anymore? Is it because people don't want them or because they aren't available? Banks control supply, not borrowers.

I'm not saying borrowers have no responsibility, but anyone who takes on any mortgage or loan of any size, should always of worked out their budget before taking it on.

Rinoa

AliceJenkins wrote: »

I'm not going to be the most popular person posting this but here goes...

Why is is that all we hear is everything's the banks fault and "the rich".

Opinions?

And baby boomers, don't forget the evil baby boomers Alice.

Jimmy_31

AliceJenkins wrote: »

I'm not saying borrowers have no responsibility, but anyone who takes on any mortgage or loan of any size, should always of worked out their budget before taking it on.

Or lending it out.

CLAPTON

depends what you mean by 'blame'

the bankers were responsible for the collapse in the banking system by their corrupt practices in concealing debts and disguising poor quality debts as high quality debts

Caveat_Mortgagor

The problem is as much with the regulators as the banks.

People are stupid and greedy, that is human nature. Any economist can tell you about 'credit bubbles'. You may have heard of the south seas bubble, the tulip bubble, the tech stocks bubble. There have been many bubbles in history. A bubble in essence is a massive increase in a market price for a commodity which happens because people get greedy and borrow money. The more they borrow, the more the price increases. Until it busts.......

Bubbles are nasty and destructive. Again any economist will tell you of the destructive force of a bubble and how they should be avoided at all costs.

They are essentially borne of people borrowing a lot of money to invest. Ultimately the investment comes back down to earth.

We have just been through a bubble. This time the focus of the bubble was the housing market.

The after effects are that if people had bought houses at 4 times salary instead of 8 times salary, their mortgage payment would be half as much and they would have much more 'discretionary income' to spend as they wish. This would help the economy enormously. Alas much of todays salary was spent yesterday.

The politicians stated aim of the economy is growth. But yesterday we spent much of todays money, how can we spend the same and more today?

A credit bubble has wreaked massive damage on the economy. We know that people of all levels of intelligence are prone to getting caught up in the hysteria that bubbles generate. It is the regulators job to ensure they dont happen.

The banks 'should' accept some responsibility for ensuring they dont happen.

However, the banks and the regulators didnt focus on long term sustainability. The banks created a bonus structure that rewarded short sightedness. The regulators didnt stop them. The stupid people fell for it again!!!

But do you blame them for reacting according to the laws of nature?
If an aeroplane falls out of the sky, do you blame the way it was built and maintained, or do you blame the laws of gravity?

People are stupid and need to be protected from themselves. The banks and regulators failed. They should all be shot.

AliceJenkins

Jimmy_31 wrote: »

Or lending it out.

Who's saying they don't? at least read what I've written.

Jimmy_31

AliceJenkins wrote: »

Who's saying they don't? at least read what I've written.

I could have borrowed way way more than i could have normally borrowed during the housing boom.

Plenty of people lied to the banks to get more and more money, the banks gave it to them.