Bad Debt Cost Rising
in the UK are expected to have cost the five big banks in this fair land, maybe the five chairmen of those banks should take a seat, before the figure is read out, sitting comfortably lads, well here goes, £11 billion or maybe even more. This is usually put down to the economy showing a turndown in fortunes, but in this case, much is being made of the fact the banks have been a little too trusting in who they have been giving they’re money too.
The reason it is different this time than any other in the past, is that the banks are still recording massive profits, which are out scoring the amount of bad debts that are having to be put down to bad judgement and written off, with some of that being from loans that were made in distant lands.
The largest group who have found trouble in paying their debts, have been the younger borrowers and individual debtors, rather than those loans made in the business world, so the situation is not as serious, as it would have been if it was businesses who were failing to pay back they’re debts.
What with the falling high street sales figures and the level of debts, which are widely reported that the consumer has, after a buying boom in recent years, which has been financed by credit cards, loans and even some because of rising values in the housing market and with those who have now over stretched their finances, the knock on effect runs right through the whole economy.
A lot of this is down to the lack of searching out the right customers by the banks, who are slightly guilty from a lack of foresight on the effects that this would have not only on themselves, but those who now find that they have a debt that they can't service, which they shouldn’t have had in the first place.
Though give due to the banks, who have now tightened up they’re act and have began to be a little more choosy on who they let borrow they’re cash.