Two in seven people (29%) believe banks are responsible for today's financial mess according to a new study by money website Fool.co.uk. Almost everyone (94%) says they have had their credit limits raised without even being asked.
The Blame Game
But banks aren't the only ones being blamed for the credit crunch. One in five people (22%) place responsibility squarely on the shoulders of the Government. One in four (23%) blame themselves, and another one in four (26%) reckon consumer culture is culpable. They believe that a desire to "keep up with the Jones'" has forced people to take on unnecessary debt.
The Music Stops
The Bank of England reported a massive slowdown in lending to individuals this week, which will be welcomed by those consumers who blame banks and their irresponsible lending for the current credit crunch.
According to the central bank fresh mortgage approvals has slumped 70%. Meanwhile, total lending over the same period has halved from £31.7 billion to £16.8 billion.
Question Time
However, the questionable lending still goes on: one in nine (10%) were given credit even though they had a bad credit rating. Elsewhere, almost half (44%) say they have been offered credit they knew they couldn't repay. But only one in six (16%) actually accepted the credit.
Despite pointing the finger at banks and their irresponsible lending, three out of four (74%) admit that they don't read the small print when signing credit agreements. Furthermore, one in two (48%) claim to have used one form of credit to pay off another.
David Kuo, Head of Personal Finance, at Fool.co.uk says: "Both the banks and the Government have to take equal responsibility for the credit crunch - banks for peddling unaffordable loans and the Government for lulling people into believing that there would be no return to boom and bust.
"The Bank of England's lending figures suggests that UK banks have learnt the first lesson of holes, namely that you must stop digging when you're in one. Now the Government must learn this lesson too.
"It must reject the idea that it can solve the UK's debt problem by throwing more money at it. Collectively, consumers are drowning in £1.4 trillion worth of debt, of which £1.2 trillion is mortgage debt and £233 million is unsecured loans. We now need time to pay off those loans, and it will take more than consumers hanging their heads to solve the problem.
"The Government must not use tax payers' money to lend to taxpayers. This is tantamount to robbing Peter to pay Peter. It is not only nonsense, but dangerous nonsense too."
