My final piece


Many questions have been raised about whether the banks were to0 lenient prior to the financial crisis of 2008 and, in my opinion, they should've been more cautious. There are three main points; however, I’d like to focus and raise my opinions regarding how bankers shouldn’t lend money to people who may not or won’t pay it back.

Firstly, I believe that this could be an newly enforced rule but if we did use it and make it a very strict rule regarding how would we know and monitor whether someone will definitely pay it back. It could be argued that you could check previous payments made by the client - though this may not be entirely reliable - and it could be simple, small payments that are easy to pay back anyway. If someone was to take out a loan, I believe they should offer a possession of theirs that it worth the value of the loan they want. That way, a person wouldn’t be borrowing anything out of their parameter to repay it. The entirety of their loan would be covered by their possession they have given to the bank.

Secondly, if this rule was put into place would it be taking a risk -which is another argument being discussed currently- and risk aren't always rewarded and with banks it’s very serious that they always do their job right and if they do something wrong it may cause a huge problem that would be harder to fix. On the contrary, you may get a bigger reward than if you chose to be safe. So if you were to add this rule would it mean you’d be taking a risk, unknowing whether it would work out or not?

Finally, if you were to chose this rule then would it mean that it might cause conflict between the citizens and the government from angry customers that were rejected from a loan when they were in a time of desperation. It may also cause conflict because he banks become to strict and not many people manage to get a loan after a few difficulties in paying back money for something before even if it was a minor financial issue that was during a struggle. It may also mean that no-one would be ever be able to buy a house, as that is the whole point of a mortgage: to pay a significant amount of money. This would harm the economy, as houses wouldn’t be being sold, renovated or built, which would mean people would be made redundant.

To conclude, I believe that if this rule were to be used then it would cause its own problems; however, would it be so beneficial that these potential problems would be outweighed? It could mean that house prices drop to a reasonable amount again, like they were years and years ago and that inflation would be stabilised, or even stopped.

Personally, I believe that it shouldn't be enforced because I think it would cause further problems that could affect more of the UK and would cause many debates and arguments about infuriated denial of access to a loan. It was just cause more hatred towards the bank and in the long-term how certain would it be for it to be sustained?