Money Trap – How Banks Works
A senior banking executive exposes how high street banks purposefully
target their customers and push borrowing. The informer tells how the industry
is driven by aggressive targets, uses hard-sell strategies and
sophisticated marketing techniques, and profits from customers in financial
difficulty. The programme highlights one of an alarming number of people who
have killed themselves when their debt spirals out of control.
This documentary video reviews some of the extravagant and destructive
lending practices of the high street banks in the years of the credit bang
which preceded the financial crisis. Indeed this documentary is in a sense alarming
given what happened during the global financial crisis; i.e. super easy credit,
high pressure to make money, huge incentives for banks to lend easy money. The
documentary video reviews the sales and marketing diplomacies, how banks
benefited from the lending display, and some of the fallout e.g. debt related
suicides. This documentary should serve as a case study in banking regulation;
not just in terms of procedural regulations but also in terms of higher level macro
prudential regulation to curtail excessive credit growth, particularly during
unsustainable credit booms.
The Banking Code Standards Board is to inspect The Royal
Bank of Scotland (RBS) after Scene investigated debt-related suicides. Informer
break the banking industry’s code of silence. She says that high street bank
lending practices put profits before customers at every given opportunity in
order to push borrowing.
Both the bank and Mark were at fault. He shouldn't have spent all that
money that he didn't have (or didn't exist, rather) and the bank shouldn't have
preyed on someone who was so obviously irresponsible with money. It's the same
as a drug user / drug dealer relationship. Yes, the user is making a bad personal
choice by using the drug, but that still doesn't make it okay for the dealer to
supply it.
Problem in this documentary like this one is how the blame is solely lay blame on the banks. The problem is that I see people being the normal mundane people and absolutely refusing to educate themselves on how banks work. What I mean by that is that people refuse to have a fundamental understanding with how banks turn a profit. If people took the time to educate themselves about the economics of banks, they're decision making would be different in regards to credit cards. What I'm getting at is that there's only so much regulation you can place on banks. Now it's an issue of people actually wanting to educate themselves.
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Engr. Amaar
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