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Thursday, 9th February 2012
Home > Polish Property Blog > Whose Fault is the Credit Crunch?
Whose Fault is the Credit Crunch?
April 2008
"Every product or service available to man has been, or will be, misused at some point." |
I've read alot recently about those waiting for a drop in house prices pointing out with glee that the current global situation has been caused by the banks and they must now take the blame. The truth is the fault lies on more than one side. Banks provide a product, the mortgage. To some extent they check if the buyer of this product is able to use it sensibly but for an item with a 25 year life span this can only be within reason. Over such a long time span everybody's circumstances change. But every product or service available to man has been, or will be, misused at some point. To put it another way if I buy a radio and get an electric shock from it the producer is to blame. If I take it into the bath with me and get an electric shock, I am at fault. I hit my thumb with a hammer the other day as I was trying to put a nail into the wall. Perhaps the manufacturer should have checked my DIY capabilities before selling the item to me, then I wouldn;t have a bandage on one of my digits. So when the evening news rolls some hapless individual onto the screen who is struggling with his mortgage it is ridiculous to proclaim this is all the bank's doing. Yes, in America much of the sub-prime woes of the current time are down to lenders mis-selling, but in Europe this is not the case. In Poland the banks have been even more prudent from the start but they cannot forsee that Mr X might loose his job and not be able to pay his mortgage and they cannot forsee that Mr X did not predict his redundancy and make savings for a rainy day. On this side of the atlantic stories of people in credit troubles are on the news only because they make a good story at the moment. The knee jerk reaction of banks to tighten credit control in Europe because of stupidy in the states is temporarty and will abait. The ability of humans to misuse products is permanent. I doubt this is the last bandage I will be putting on my thumb. |
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