Quote ="Dally"So as he saI'd, the banks lent recklessly to give the punters what they wanted - money that was unlikely to be repaid and unlikely to be supported by security.'"
Northern Rock were lending recklessly but in doing so encouraging borrowers to borrow recklessly. On the day the crap hit the fan with them I recall vividly people phoning into a radio station I was listening to on a long drive, stating how they had been attracted by NR adverts for 100% mortgages but once sat in front of the branch "advisor" had been tempted by stories of how their proposed property would increase by 7 or 8% per annum and so borrowing 110% was not reckless but financially advisable, after all in two years time you'd have equity in the house !
Some callers spoke openly of adding ten grand to what they really needed to pay for furniture, carpets etc, one caller went out and bought a new car on the excess mortgage cash - they were only just starting to realise that they had bought a carpet and a sideboard on 25 years finance, and they'd sold the car last year but would be paying for it for the next 22 years.
You cannot blame individuals for such poor financial decisions as the majority of adults don't even run a household budget let alone deal in financial markets or even stop to think when signing up to a mortgage - you can however blame the lenders who are the self proclaimed experts (or so they thought) for actively luring in people into the honey pot trap of free money.
The reason that we have controls on financial organisations is to save ourselves from their greed because without it they'd sign up all sorts of gullible people without a second thought for their welfare just so long as the "advisor" (who is nothing of the sort) gets his/her bonus this month.
