Why blame the bankers? It was the consumers fault.

[MattM]

Why are the bankers scapegoated as the cause for the economic collapse when it was the greedy consumer that caused the problems we face?

They wanted more and more, signed contracts to get credit, said they'd pay back, knowing their finances were tight.

People bought houses trying to make a quick buck, the consumer bought and bought thinking the rosey coloured clouds would stay forever.

The bankers just facilitated the greed of the consumers and developers that drove this country and the world into the place where we are now.

It was the consumer not the banker that caused this economic collapse.

[toxic avenger]

There's certainly a case for personal responsibility to be upheld on the part of large numbers of people who bought into the 'get rich quick' hype. People who essentially gambled their family's futures against the bubble deserve little sympathy. But others were convinced by people who should have known better that there was no gamble, that 'boom and bust' had ended for ever, that growth would be continuous. People like the bankers, the developers, and the politicians (plus their media mouthpieces) vilified those who quibbled. Ahern told them to commit suicide, remember. Other people still felt they had no choice but to gamble, if they wanted to live within 50 miles of their families or their job. And they were officially encouraged to do so. And others still, many of them pillars of society to whom we are all looking for answers now, made fortunes of the bubble, getting out just in time. The people that you are criticising tend to be only the poor dupes left holding the parcel as the music stopped.

The banks encouraged the bubble, lended recklessly, fiddled the books to the point of fraud, and left all our savings exposed to being wiped out because of their own insane greed. And they are precisely the people who knew better, who knew that capitalism can not be cured of its inherent cyclicality. That's why the bankers are getting it in the neck now, and deservedly so. My only quibble is that it means that the politicians and developers/big business types are getting away with it...

[ManOfReason]

Two things the bankers should have done to prevent this:

1) When a developer asked for 10 million to buy a site, on which he wanted to cram a couple of hundred houses, 40 to 50 miles from Dublin the bankers should have said NO.

2) When a young couple earning 40k between them asked for 300K to buy one of these badly build houses in the middle of nowhere the bankers should have said NO.

In essence if the bankers stuck to their own supposed rules we would now be in a minor recession instead of being on the verge of financial meltdown.

[jpc]

Why are the bankers scapegoated as the cause for the economic collapse when it was the greedy consumer that caused the problems we face?

They wanted more and more, signed contracts to get credit, said they'd pay back, knowing their finances were tight.

People bought houses trying to make a quick buck, the consumer bought and bought thinking the rosey coloured clouds would stay forever.

The bankers just facilitated the greed of the consumers and developers that drove this country and the world into the place where we are now.

It was the consumer not the banker that caused this economic collapse.

The banks had access to cheap money.
They became addicted to profit margins that were way beyond historic norms.
The banking brass became addicted to their bonus structure.
This was performance related.
To keep generating the same % increase year on year steadily riskier loans were handed out to stadily less credit worthy applicants.
Whick explains housing estates in the middle of nowhere.
Then you had a demographic group who came of age at the dawn of the cheap credit era which fed the above profit model.
The demographic never knew anything but plentiful employment and cheap money being marketed at them, often with the most cursory credit checks.
And the rest is history.
The Tiger ate itself.

Oh and a gombeen political ideology that was more intrested in the trappings of power than the weight of governance.

[joel]

Why are the bankers scapegoated as the cause for the economic collapse when it was the greedy consumer that caused the problems we face?

They wanted more and more, signed contracts to get credit, said they'd pay back, knowing their finances were tight.

People bought houses trying to make a quick buck, the consumer bought and bought thinking the rosey coloured clouds would stay forever.

The bankers just facilitated the greed of the consumers and developers that drove this country and the world into the place where we are now.

It was the consumer not the banker that caused this economic collapse.

Mea culpa! - and I stuff my mattress with banknotes. To think its the poor Bankers that are blamed!.....

[goosebump]

Two things the bankers should have done to prevent this:

1) When a developer asked for 10 million to buy a site, on which he wanted to cram a couple of hundred houses, 40 to 50 miles from Dublin the bankers should have said NO.

2) When a young couple earning 40k between them asked for 300K to buy one of these badly build houses in the middle of nowhere the bankers should have said NO.

In essence if the bankers stuck to their own supposed rules we would now be in a minor recession instead of being on the verge of financial meltdown.

That's true, but it doesn't exempt the lendees from culpability.

The whole country seems to have developed collective amnesia re. the property bubble. The same newspapers that are today telling us that the bankers are to blame were telling us about 3 demi semis being good buys at €400k 2 years ago.

[ibis]

That's true, but it doesn't exempt the lendees from culpability.

The whole country seems to have developed collective amnesia re. the property bubble. The same newspapers that are today telling us that the bankers are to blame were telling us about 3 demi semis being good buys at €400k 2 years ago.

Good Lord! Are you suggesting that we shoulder some of the blame? Just because we sold our houses at inflated prices, elected the government, ignored the mess in public services because we could afford private services, nodded at planning corruption as long as we could get some, did no more than roll our eyes at decentralisation, benchmarking, the deconstruction of the regulatory environment and the increasingly obvious contempt of the Cabinet for the Dáil...I just can't see how we're responsible at all.

[ArtyQueing]

which is why would want a more distributist type of mortgage - were the lender also shares in the risk - to stop excesses on both sides

[PhoenixIreland]

Why are the bankers scapegoated as the cause for the economic collapse when it was the greedy consumer that caused the problems we face?

They wanted more and more, signed contracts to get credit, said they'd pay back, knowing their finances were tight.

People bought houses trying to make a quick buck, the consumer bought and bought thinking the rosey coloured clouds would stay forever.

The bankers just facilitated the greed of the consumers and developers that drove this country and the world into the place where we are now.

It was the consumer not the banker that caused this economic collapse.

Because they stimulated that greed, activly stoked it up and stimulated it, that greed (despite what people say) is not human nature and didn't come out of thin air.
They pushed the idea that it was great to own a turkish apartment and brag about it at the BBQ.
They "pre approved" people for their credit card limit hikes.

Don't get me wrong, the people paying 100s for prada bags on their credit cards are ******************************g morons, but their stupidity was manipulated and stoked by the banks.

[mollox]

Two things the bankers should have done to prevent this:

1) When a developer asked for 10 million to buy a site, on which he wanted to cram a couple of hundred houses, 40 to 50 miles from Dublin the bankers should have said NO.

2) When a young couple earning 40k between them asked for 300K to buy one of these badly build houses in the middle of nowhere the bankers should have said NO.

Some thoughts in response to your points above:

1. Why would a banker think s/he knew more about the value of development land, and the likelihood of selling those couple of hundred houses, than the seasoned developer whose area of expertise this was supposed to be?
Particularly when the Govt, in every budget for the past decade or more, has included/renewed/extended measures to incentivise those same developers, property investors and first time buyers? If the developer AND the Govt were shouting YES WE CAN.....?

2. How many young couples earning 40k between them actually got 300k direct from a bank? How many of them actually got their money through mortgage brokers/estate agents who were quite happy to "massage" the income figures, knowing how the system worked? Such brokers would, after all, typically get a €3k commission on that €300k mortgage, for doing very little work indeed.

3. How many of those "First time buyers" (perhaps incl. your young couple) would be better classified as "investors" - seeing a supposedly "failsafe" way of making a quick, hopefully large, profit while using someone elses money to do so?

The sad reality is that there are no real saints/devils here - Banks, Govt., Developers and Buyers all lost the run of themselves.