Nope - the problem is people not being able to afford to pay for the debt they've taken out. The banks repackaging the debt to sell (as less risky) has merely masked the underlying problem for a while - fundamentally individuals and the banks are at fault - the individuals for borrowing more than they can afford, the banks for lending on loose criteria (as with the rest of society, no-one thinks they should take personal responsibility any more).



Gordo

 

^^ It's the Banks fault as they lent out the money to people they shouldn't at high interest rates as they are greedy b*stards!

TX.

 

Noone's saying the banks aren't to blame. It is also the fault of the hapless idiots who borrowed money they couldn't afford to repay. It's just a ****ter that those of us that didn't over-borrow are now suffering because of the idiots (both bankers and the borrowers who over-stretched themselves).

(I'm confused by you mentioning interest rates - a) they've been low for a number of years; and b) - see above. If people didn't like the rates, they didn't have to borrow!).

Gordo

 

I would disagree.

OK, the banks shoild have behaved more responsbly, I am not denying this, believe me, there is no love lost for Andy Hornby here, but everyone needed to behave more responsibly.

Why do millions of people think they deserve endless lines of credit? It's like parents who blame everyone else for their child's behaviour. Maybe if they took a bit of responsibility......................

The banks just did what they were allowed to under the regulations, so they were no worse than anyone else.

I notice no one complained about the banks behaviour when everything was rosy

Geezer

 

Dont worry every branch managers getting a slice of 100 millllion 'reward' to emulate their top cat boss thiefs

 

The roots of the present crisis can be found way back in the reign of Bill Clinton's administration

They were the people who told the banks that it was racist to refuse mortgages to broke-assed serial loan defaulters, because historically they happened to be black or hispanic

So to avoid being branded as such, American banks extended loans to all and sundry, safe in the knowledge that when (not if) they defaulted, sale of their houses would cover the debt

The problems arose when the banks couldn't sell this vast stockpile of houses for anything even close to what was owed on them
These are the poisonous debts that have been repackaged again and again, then sold on to unsuspecting banks worldwide

Lloyds, who I bank with too BTW () Seemed to have done a damned good job of steering clear of all this, only to be brought down by the OESI and his bumbling incompetence

 

This type of ill informed tripe does no one any good.

This simply is not true. Lloyds will pay out a bonus this year, but only to those divisions that made a profit, and then only to people who have satisifed the requirements. LTSB made £2.4 billion profit, why shouldn't they?

We (the HBOS part) are unlikely to get anything.

Geezer

 

Unfortunately Geezer, the ill informed tripe is the only message being reported by the so-called 'responsible' jounalists covering the story

In fact I read the lastest report on the BBC's website. and was so incensed by the obvious laziness of the reporting, that I emailed the BBC to complain! Both about that story in particular, and the disgracefully poor standards of current BBC news reporting in general

 

In the light of this I can't work out why Lloyds took over HBOS. Surely their due diligence would have identified a £10bn turd sitting there?

 

The words 'Undue Haste' do spring to mind

Plus I think they took Flash & Darling at their word

 

Because debt is good ?

 

Because despite HBOS toxic debt, they have the biggest slice of the mortgage business by some margin. Wouldn't you want a piece of it?

Also, that sort of organisation is only a dream for most people, monopolies commission wouldn't usually allow it. Despite HBOS having lost so much money, they are a very talented bunch of people, and when Lloyds give them their parameters (which will be much more conservative) they will make the company alot of money again (this time hopefully without killing the economy ) LBG is in a very strong position, I would imagine the other banks are casting a somewhat envious eye over us.

Geezer

 

Define "very talented"

Can you imagine how much would have dissapeared if they were a bunch of greedy clueless idiots !

 

High risk borrowers were charged more (interest) remember = more money (higher profit) to the Banks when debt was being repaid albeit higher chance that they'd default along the way. Good grief, perhaps they saw it coming; no worries though as the taxpayer has / will bail them out

TX.

 

Well, the same morons who took out the loans then thought they had got away without repaying them have now repaid them through their taxes!

The public should see this paying for their greed

Geezer

 

Yeah, and imagine how badly the banks would have done if endowments and pensions hadn't performed so brilliantly or been subject to any mis-selling - its win win in this game

D

 

Quite right - everyone is very quick to turn round and blame 'the banks' for the current problems, but it shouldn't be forgotten that many individuals have behaved in a very similar manner - borrowed too much, assumed house prices will only go up etc.

The banks aren't blameless, but the greed which has caused this financial crisis has not been restricted to those institutions.

And again, I completely agree with the above - it's very easy to point out the problems with hindsight, but go and search for threads a year and a half old and see how many people were warning that banks were lending too much, or that investment funds were making too much money by investing in credit default swaps and other non-vanilla instruments.

 

Very true - the BBC has done some good reporting on the issues, such as Evan Davis' series on the City, and a lot of what Robert Peston does, however the website in particular focuses a lot on Daily Mail type headline grabbing stuff.

 

I'm still confused - you've said it yourself - they charge high risk borrowers more. Good. Otherwise we'd all be paying more in interest to fund the hapless. Why is this greedy on the part of the banks?

The margin lenders charge is the risk premium - well understood in the corporate world, much less so in the personal finance world. I'd argue the risk premiums the banks were charging many customers were nowhere near high enough - which is why it's now all coming home to roost.

 

Ermm There were plenty people suggesting the banks were lending too much

ffs when someone is ALLOWED to borrow 7 times their salary leaving enuff left over for sandwiches something is wrong

 

Indeed something is wrong, it's worrying that someone would be so stupid as to do that, but do it they did!

You are right, there were plenty of people warning about the bank, but vastly more who didn't care, and that was the problem. Everyone rubbed their hands with glee as the property market spiralled out of control, spent money on endless credit cards offered to them. It has come back to haunt them.

I don't know why you can't see that it is not the banks alone who have created this Guilty of all of the above perhaps?

Geezer

 

Flash asked them to so they thought a bit of crawling might go down well! He even altered the country's competition rules just for them to do it!

Les

 

Much truth in that - I wonder how much my home, sorry 'property' would have cost me if there hadn't been such a gold rush/bandwagon. Could have been another win win!!!!! Nett result lose lose - and yes I blame the banks.

D
(apologising profusely for the corporate speak speak )

 

It's interesting that in all this no one has had a go at estate agents. They after all pretty much have created the property price problem. What qualifications do they have really? They just arbitrarily set a price, and considering they take a percentage and not a set fee, it's been in their interests to get it as high as possible.

You only have to look at some of these property programs when they get 3 different ones to come and evaluate them to see just how poorly it is done.

Geezer

 

Geez - start a whole new thread. I'm REARIN' to go

D