The New Rule for Banks

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The financial crisis was what the Royal Bank of England went through. They did not handle their loans correctly, therefore they lost most of their money. They gave the loans to the public even though they knew it was too much money to pay back so the public did not give any money back. This caused the bank to fall into financial crisis.

I think the new rule should be safer lending. When people want a loan, the bank should hold a meeting with them. The bank will ask the people their plan and if they would get the money back on a certain date. After that, they will set a date that they think is suitable to get the money back, along with a payment plan, be that monthly or in lump sums.

The bank gives the money in small parts, they do not give it all at once. This way the public can invest in their business and it can continue to prosper. Then they will gain money and they will take some of the money they have gained and use that to pay of that part of the loan. The bank will then give them another chunk of the loan. If the bank doesn’t receive the chunk of the money back on the date, or if the payment plan hasn’t started, they will remove the loan and the people will fall into a big debt.This will help the banks to control and keep track of what is happening with the loans. To do this they will need to assign different people to keep track of the loans and when some money is coming in. Often banks don’t have enough staff to do all this work so I think they should create a Keeping Track of Your Loans app. This would make the loaning system more efficient and people could give the money back online.

In conclusion I think that we should use safer lending so the banks are not likely to have another financial crisis.

Comments (4)

  • Tiff-Avatar.jpg Tiff @ the BNC 1 week ago

    Some of the things you've suggested are already done by banks, such as setting dates, meeting and payment plans. For example, to get a mortgage you will need to prove to the bank that you earn enough to meet monthly payments.

    I'm really interested in your idea of part loans. What are the benefits of this and what are the downsides? For example, someone needing to borrow quite a lot to buy a house wouldn't be able to borrow enough.

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  • St-Gregorys-logo-250x250.jpg entertaining_tangerine
    St Gregory's Catholic Primary School A 1 week ago

    I believe that the term mortage should never be used because ,loans are causing the trouble and if mortgages hadn't been invented the financial crisis would have never occurred. To be honest , it s like pocket money .you get in trouble ,your parents say that you have to repay for something you broke but basically they give you the money they earn and in the end you use your parents money to repay what you broke,so they pay the thing you broke . If mortgages don't exist then people would work harder to earn their living , that is a good thing because then the locals will feel good that they all take part to improve the community.

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  • St-Gregorys-logo-250x250.jpg entertaining_tangerine
    St Gregory's Catholic Primary School A 1 week ago

    Sorry and another error I meant mortgages not a loan.

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  • Ormiston-Bushfield-logo-250x250.jpg modest_boysenberry
    Ormiston Bushfield Academy 1 week ago

    They will give them the much that they need but they will not give them all of it so that they know that their money is being used properly. If they give them all of the money then it could all go into the business and they will not get any money back

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