Wise words, shame about the non-action

Alastair Darling is spot on when he suggests it's time banks returned to more "old-fashioned" ways of operating, particularly when it comes to lending money (see here). I couldn't agree more. Sadly, his response is typical of this government: "My starting point is that government can't stand on the shoes of borrowers or lenders." Or in plain English, "I'm not getting involved, even though my government will happily interfere in other aspects of life."

The next phase in the debt crisis coming home to roost is already here, when Abbey became the first bank to raise interest rates independently of the Bank of England to help bring in more cash. What's basically happening is that those who can afford to pay their debts are now being squeezed to pay even more back to the bank to cover its irresponsibility in lending to people who have a poor debt record or no intention of paying that money back.

There are millions of people in unsecured debt for good reason, but there are many millions more who are in a tight spot because they have no concept of self-restraint or responsibility, and because the banks have for far too long been negligent in handing out loans. As a result, people like me who are naturally careful with money (say "tight" if you like, but I know I find it easier to sleep at night knowing my only debt is a mortgage and occasional credit card that is paid off every month, backed up with money I've carefully saved over the past 10 years) are being asked to effectively hand money over to the banks so they can effectively write off debts incurred by lending money to people they've not vetted properly.

So on behalf of all the "tight" people in this country, I'd like to thank the banks for failing to act responsibly and sensibly over the past few decades. It really makes us proud to know that you're so incompetent you're now forced to lean even more heavily on your loyal customers who do pay what they owe you.