Tuesday, 20 November 2012

The Money Trap - How the Banks Lure You into Debt

A senior executive blows the whistle on the banking industry's usurious lending tactics. This documentary reviews some of the profligate and predatory lending practices of the high street banks in the years of the credit boom which preceded the financial crisis. Indeed this documentary is in a sense chilling 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 reviews the sales and marketing tactics, how banks benefited from the lending splurge, 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 macroprudential regulation to curtail excessive credit growth, particularly during unsustainable credit booms. See also (the US version): Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders

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Finance Documentaries: http://www.financedocumentaries.com/2012/11/the-money-trap-how-banks-lure-you-into.html
Posted by financedocumentaries at 10:23
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1 comment:

  1. Well, recent report by the Federal regulators Consumer Financial Protection Bureau (CFPB) revealed how the banks offered short-term credits and gradually made the consumers fall into a never-ending debt trap. Banks also offer short-term, high-interest credit in the form of deposit-advance products. The regulators have decided to keep such lending practices under strict control. The banks will be required to determine a borrower’s financial status before allowing him such financial aid. Apart from that, they’ll need to disclose the APR to the consumers, and have to wait for a billing cycle before allowing instant credit to the same customer.

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