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>I feel that if workers tried to steal billions of dollars from the rich they would get thrown in jail Why is that? All evidence points to the contrary. Take f

by n09n 13y ago

>I feel that if workers tried to steal billions of dollars from the rich they would get thrown in jail Why is that? All evidence points to the contrary. Take for instance, the collapse of the housing market a few years ago. Not only were the borrowers not jailed, most people even blame the bankers.

wavefunction 13y ago
The bankers' entire business of lending is predicated on their understanding of risk and proper extension of credit dependent on that risk. To extend credit as they did to people who were obviously not credit-worthy is to abandon the main responsibility of their profession and for what? Short term personal gains via "performance bonuses" based on volume? The bankers deserve blame and jail time for endangering the entire economy with their short-sighted greed.
- vidarh 13y ago
  Exactly. For some perspective: In the UK, if a bank extends credit to people who were obviously not credit-worthy at the time of applying, based on the information available to the bank, not only is the debtor not at fault, but the debts can in many cases be wiped out by the courts. And it happens regularly - people have had entire mortgaged just struck off because the banks were found to have acted irresponsibly when giving them out. The banks here have a legal responsibility to understand their customers ability to repay, and to not extend credit that is likely to cause their customers substantial financial hardship. The reasoning for this is that there's a massive information symmetry - most people do not understand the full risks, and are easily seduced by the thought of a new house and possibly smooth talking real estate agents to look at think in the most rosy way possible, while the banks know very well the hard data on what financials are likely to cause defaults when you take into account risk of unemployment, budgets, unexpected repairs, likely interest rate movements etc..
eli_gottlieb 13y ago
>Not only were the borrowers not jailed Yes, that's because debtors' prison is considered immoral. Failing to pay back a contracted loan is not stealing, since the loan was given with the lender's consent and, had they done their homework and acted honestly, their exactly quantified knowledge of the risk of nonpayment they were taking on themselves.

by n09n 13y ago

wavefunction 13y ago

The bankers' entire business of lending is predicated on their understanding of risk and proper extension of credit dependent on that risk. To extend credit as they did to people who were obviously not credit-worthy is to abandon the main responsibility of their profession and for what? Short term personal gains via "performance bonuses" based on volume? The bankers deserve blame and jail time for endangering the entire economy with their short-sighted greed.

vidarh 13y ago
Exactly. For some perspective: In the UK, if a bank extends credit to people who were obviously not credit-worthy at the time of applying, based on the information available to the bank, not only is the debtor not at fault, but the debts can in many cases be wiped out by the courts. And it happens regularly - people have had entire mortgaged just struck off because the banks were found to have acted irresponsibly when giving them out. The banks here have a legal responsibility to understand their customers ability to repay, and to not extend credit that is likely to cause their customers substantial financial hardship. The reasoning for this is that there's a massive information symmetry - most people do not understand the full risks, and are easily seduced by the thought of a new house and possibly smooth talking real estate agents to look at think in the most rosy way possible, while the banks know very well the hard data on what financials are likely to cause defaults when you take into account risk of unemployment, budgets, unexpected repairs, likely interest rate movements etc..

eli_gottlieb 13y ago

>Not only were the borrowers not jailed Yes, that's because debtors' prison is considered immoral. Failing to pay back a contracted loan is not stealing, since the loan was given with the lender's consent and, had they done their homework and acted honestly, their exactly quantified knowledge of the risk of nonpayment they were taking on themselves.