Why everyone is to blame for the financial crisis?

Today, we were talking about who was really to blame for the financial crisis. There were four different choices: the government, the banker's boss, the individual banker or the general public. In general, there were valuable points for each arguement ; therefore, I decided to make a list of reasons for each person.

The person who was asking for loans could be responsible for the crisis. I believe this because the people could be asking for loans for absurd reasons. For example, they could be asking for a loan to buy an expensive watch. This would be invalid because it is not necessary to have a watch. Also, the person asking for a loan could know they wouldn't be able to repay the loan but could still ask for them. This meant that the banks would run out of money. This would mean that another financial crisis was caused.

However, this could also be blamed on the individual bankers. This is because it would be obvious if a loan was unreasonable. This would cause a financial crisis because there would be everyone getting the loans they wanted and possibly not receiving all of the money (with interest).

Nevertheless, the banker's bosses could also be responsible. This is because they need to be able to keep control of their bankers instead of letting them do whatever they want. Also, because banker's bosses are giving rises and bonus' to the bankers. This implies the bankers are going to take risks with who they are giving loans to to earn more money. Also, the bankers bosses have a responsibility to make sure there bank is running smoothly. This means a financial crisis could be caused because if one bank - that loans to another bank- crashes that could cause another bankn to crash and so on.

On the contrary, the government could have caused the financial crisis. I believe this because the government have no strict rules on banking. This means that it lets the bank do whatever they want. Also, at the previous financial crisis, the government waited for the crisis to become catastrophic before they stepped in or actually took action. This means that the government could, one gain, wait for the situation to get worse before they respond.

Let me know who you think is most responsible for the finanacial crisis ten years ago.

Comments (31)

  • Ravenscroft-logo-250x250.jpg wonderful_seahorse
    Ravenscroft Primary School 08 Nov 2018

    I think it was the bankers' bosses because if they didn't give bonus' and rises the bank wouldn't have less money and also the bankers are taking risks to get money just to get rises and bonus'.

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  • Streatham-Wells-logo-250x250.jpg communicative_outcome
    Streatham Wells Primary School 08 Nov 2018

    I think everyone is to blame but it is mostly the governor because the governor did not stop the bankers bosses giving out rewards. Also the bankers wanted the rewards and then took the risk then gave out to much money and the people who borrowed could not pay it then the crisis started

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  • CuddingtonCroft-logo-250x250.jpg magical_rambutan
    Cuddington Croft Primary School 08 Nov 2018

    I think the government because they waited for the financial crisis to become catastrophic before stepping in

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  • Streatham-Wells-logo-250x250.jpg easygoing_cliff
    Streatham Wells Primary School 10 Nov 2018

    i think the bankers bosses fault because they were being too greedy

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  • Streatham-Wells-logo-250x250.jpg easygoing_cliff
    Streatham Wells Primary School 10 Nov 2018

    i also think that it is the government fault because they should of stopped the bankers bosses and they gave the money to the bank instead of schools and hospitals

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  • Streatham-Wells-logo-250x250.jpg charismatic_chameleon
    Streatham Wells Primary School 10 Nov 2018

    I agree with you that everyone took a part in this crisis. i think that the bankers bosses are the ones to blame the most, if you are a good boss you would make sure you know what is going on in your bank, and if some one is doing something that is silly or they should not be doing. Then a good boss would put a stop to it.

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  • Notley-Green-logo-250x250.jpg fairminded_penguin
    Notley Green Primary School 12 Nov 2018 in reply to communicative_outcome's comment

    I believe that you are right but other people may believe other stuf

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  • Notley-Green-logo-250x250.jpg fairminded_penguin
    Notley Green Primary School 12 Nov 2018

    even though I believe everyone is to blaim I still respect other peoples opinion are as in portant as my opinion

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  • St-Josephs-Northfleet-logo-250x250.jpg energetic_conversation
    St Joseph's Catholic Primary School, Northfleet 12 Nov 2018

    I have to argue that te fact everyone is to blame is simply not possible:
    1. There's always going to people who AREN'T overspending but still face the consequence of others overspending.
    2. Some Individual Bankers were perfectly careful when it came to lending money but throughout the Financial Crisis people suddenly lost their jobs and couldn't pay back the loan.
    3. The government aren't professionals at banking as they didn't become the Government to become Bankers at the same time.
    4. Not all Bosses of Banks didn't try to aid the Individual Bankers but not everyone will obey if their is a whole set of Individual Bankers to convince.
    I hope these points have made a slight alter to your perspective.

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  • Tiff-Avatar.jpg Tiff @ the BNC 13 Nov 2018 in reply to energetic_conversation's comment

    Great! What evidence do you have for any of these points?

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  • Willowtown-logo-250x250.jpg warmhearted_leaves
    Willowtown Community Primary School 13 Nov 2018

    I think it is every ones falt because the government is in control, but it can’t allways do stuff all the time . And the bank has responsibility’s to do stuff them selfs and they should have seen it coming

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  • Weston-Favell-logo-250x250.jpg honorable_conclusion
    Weston Favell Academy 13 Nov 2018 in reply to energetic_conversation's comment

    Although the government do not have a professional job in banking, I believe ( no disrespect intended) the fact that it is more about human nature and how most people make mistakes and that could lead to people giving out unreasonable loans. I was also curious of how much bankers earn and how much bonus they get. They can expect their pay to rise from £72,000 to £93,000. Now, although I agree with you that not every bankers boss did this, some did this , with the government allowing them to do so, therefore causing the crisis. Although I stand by my argument, I accept your criticism and believe that I possibly should have explained that I meant everybody who do this was responsible.
    Information found at https://news.efinancialcareers.com/uk-en/185046/much-earn-now-investment-banker-30s

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  • balloon.png Claire @ the BNC 14 Nov 2018 in reply to honorable_conclusion's comment

    Great curiosity which led you to research how much a banker earns! I see from your link that a junior banker (aged between 22-25) could earn £72,000 to £93,000, which is a lot! I'd be curious to know how much the average person in the UK earns so we could compare. Can you find out and report back?

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  • Bruche-logo-250x250.jpg brave_blackcurrant
    Bruche Primary School 15 Nov 2018

    I think the bosses should be to blame because they put the offer out and said that they could get more money but then you could blame the public or the bankers the public for accepting the offer and the bankers for offering more than they could afford

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  • Notley-Green-logo-250x250.jpg quickwitted_acorn
    Notley Green Primary School 15 Nov 2018

    I believe that everyone is to blame:
    1. Everyone was basically selling empty packages
    2. Everyone was being greedy with how much money they wanted
    3. Everyone basically wanted some poor people to be homeless
    However I still believe that anyone else who has an opinion different to mine is also correct.

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  • Tiff-Avatar.jpg Tiff @ the BNC 19 Nov 2018

    What makes it difficult (when trying to understand what went wrong) when a situation is extremely complicated?

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  • Noel-Park-logo-250x250.jpg fearless_wolverine
    Noel Park Primary School 19 Nov 2018

    I believe that not everyone should be blamed because of a financial crisis. A lot of people do things that leads to a financial crisis, however some people haven’t done anything.

    1.Although banks loan a lot of money to people, it is not entirely their fault because it is their job to run the bank. The government has given them orders and rules which they MUST follow, so they have no choice but to follow them or they will be fired.

    2.The government makes the rules which the bankers follow. Even though the rules might have a bad affect, i think that they shouldn’t be blamed. The reason i think this is because they are in a position where they are in charge of a lot of things. Moreover, the government isn’t a professional banker since they didn’t become a government just to become a banker.

    3.The public affect the financial crisis too. They are the ones who borrow money from banks. It isn’t completely their fault because from time to time, people run out of money. When people borrow money, it will be hard to pay back more than they borrowed since they need to earn money. In addition, a terrible incident could happen while someone is in debt. For example, the owner of the company could have passed away and no one can run the job, causing people to lose their jobs. This will mean that people will need to find another job and can not pay back money.

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  • Weston-Favell-logo-250x250.jpg loyal_meteor
    Weston Favell Academy 21 Nov 2018

    I think that in a way the individual bankers and the bankers bosses are to blame. I think this because the bankers bosses said stuff like if you take a chance and succeed you can get a pay rise. On the other hand the bankers would take these chances knowing that if they mess up there could be a big consequence.

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  • The-Ruth-Gorse-logo-250x250.jpg creative_sparrow
    The Ruth Gorse Academy 26 Nov 2018

    Last week in our group we discussed this exact issue and we were asked who was to blame for the financial crisis. Even though maybe everyone had some part to blame, I do think it is the bankers who are ultimately at fault. If the bankers did not offer people the mortgages and other loans so easily, and made proper checks to see whether they could really afford to make the repayments back, the banks would not have been in trouble. After all some people are just not very good with money and don’t really understand how money works such as interest rates and budgeting.

    People can easily be lured to make the wrong choices, and aren’t sensible with money, its like if people were suddenly offered lot of sweets and chocolates freely a lot of people would take the offer without thinking of the consequences of their health.

    I think a housing bubble happen because its human nature that most people want new houses or want a bigger nicer houses just like their friends (FOMO). So the banks were like preys granting people more and more mortgages, this meant more bonuses and so bankers have more money to invest on riskier and riskier investments as they got greedier and greedier.

    I also think the government had some part to blame as well because they did not regulate the banks well enough and looked into what was going on. So I do believe if they had looked into the banks and put in proper checks during that time, the financial crisis may not be so bad. However, I probably think that the government may not have been able to stopped the financial crisis from happening because bankers are pressured into taking more risk at all times to get a big reward. Even today we still hear of bosses receiving millions of pounds in bonuses! I have googled this and it is in my mind a ridiculous amount because they already have a large salary (average £67,500). Bonuses continues to feed the bad behaviour of greed and in this time of austerity it sounds so wrong.

    So in my opinion the Bank Bosses are ultimately to blame.

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  • Olivia-Avatar.jpg Olivia @ the BNC 26 Nov 2018 in reply to creative_sparrow's comment

    Excellent reasoning shown here, well done! Do you think that banning banker's bonuses would reduce the amount of risk they are willing to take?

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  • The-Ruth-Gorse-logo-250x250.jpg creative_sparrow
    The Ruth Gorse Academy 28 Nov 2018 in reply to Olivia @ the BNC's comment

    Yes, I definitely think that if a banker’s bonuses was reduced or capped to reasonable amount, the risk they are willing to take would be so much smaller. Bonuses are incentives for them to make a lot of money for their banks and sometimes to make an incredible amount of money requires a far more riskier approach. If one year they manage to earn their large bonuses, I feel it would just drive them even further to achieve even more bonuses for the next following year, but unfortunately the consequences could be to take more risk. The bank bosses want to have large profit for themselves or else they just wouldn’t encourage it in the first place.

    For some people a modest reward should be enough to motivate people to do well and it doesn’t have to involve lots of money. For example in our school system, we all try (perhaps not all) to collect as many stamps in our planners to gain more reward certificates. I’m sure the teachers thinks it works or else they would not implement them in the first place. However I know for some students its not something they really care about or aspire to, as it holds no value so it’s not enough of an incentive to do well. And this is why, for some people, unless its a monetary reward like the bankers bonuses there is no point.

    I think the Big bankers that want large bonuses have a different mindset to ordinary people because some millionaires are really grateful for what they have and prefer to give back to society and preach the importance to be charitable, like Martin Lewis from Money Saving Expert Guy. He says he has been lucky to achieve what he has got today so he likes to help others and to give back to society. For example he has funded from his own money for the first ever finance education textbook to all state schools, which I think is amazing! But then, it got me thinking why aren’t the bankers more like Martin Lewis could they not be charitable and donate some of their big bonuses to local hospitals? Or maybe they do, who knows?

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  • Tiff-Avatar.jpg Tiff @ the BNC 29 Nov 2018 in reply to creative_sparrow's comment

    Excellent, thoughtful comment. By giving an example from school to compare to, you've really helped explain your point.

    Banks themselves usually have a Corporate Social Responsibility (CSR) commitment. Can you research what this is? What do you think about it?

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  • The-Ruth-Gorse-logo-250x250.jpg creative_sparrow
    The Ruth Gorse Academy 30 Nov 2018 in reply to Tiff @ the BNC's comment

    Thank you for commenting on my comment I will research Corporate Social Response (CSR). And I’ll do my best to give you my point of view.

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  • Morley-Newlands-logo-250x250.jpg tenacious_whale
    Morley Newlands Academy 30 Nov 2018

    I think its the government fault because they didn't give the bosses or workers any rules to follow by if they had of the bank wouldn't of had a single problem . Company's all have a policy , which is basically rules to be followed , and t

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  • The-Ruth-Gorse-logo-250x250.jpg creative_sparrow
    The Ruth Gorse Academy 02 Dec 2018 in reply to Tiff @ the BNC's comment

    Corporate Social Responsibility (CSR)

    So after a lot of research, CSR is basically a broad term for businesses to make sure they have ethical practices and to be concerned about social welfare, local communities and the environment and not only just, to be concerned about making lots of profits.

    And through my research I came across this Youtube video
    https://www.youtube.com/watch?v=w69sEZgS4sk
    A list of “Top 5 Companies with Best CSR’. It rates the company with a CSR score and it explains its reasons for their listing.

    1 Google 2 Microsoft 3 Walt Disney 4 BMW 5 Lego

    And this is what Google say for it self for its high CSR rating. ‘Google China Social Innovation Cup for college students. Supporting earthquake relief ethics. Google grants.’ CSR score=75.4

    To be honest I don’t know too much about how the other companies operate and whether any of the facts are correct as it requires a lot more research. However my first concerns were, how are CSR scores rated? Who makes the score and by whose ethical standards do they go by?

    The main negative thing I hear about Google is that it doesn’t pay enough taxes, despite it’s huge profit, the company pays little tax to the government. Amazon is also guilty of that too, whilst it makes huge profit the company uses our infrastructure like our roads and encourage air pollution with more lorries on our road yet the company pays little tax to offset the problem, so are they ethical?

    By researching about CSR it made me remember the Iceland orangutang advert and their quest to ban the use of palm oil in their own foods. If you haven’t seen it I recommend you check it out:

    https://www.youtube.com/watch?v=JdpspllWI2o
    It makes you aware of what we buy, have a major environmental consequences. The video shows the plight of the orangutang’s habitat because farming palm oil causes the destruction of the Indonesian rainforest as well as having a negative impact to the local people. Farming palm oil is also deemed unsustainable. In my opinion, if I was to rate the CSR rating for Iceland based on their efforts, it would be very high. (Note, the advert is ban because it’s deemed too political, I don’t understand the reason myself)
    I feel a good CSR practice from a company must think about how they make their money by thinking of where they get their supplies and also how they must treat their workers fairly. However donating money to charities to make them appear ethical is not good enough if they don’t pay their workers a good wage. CSR is good in practice as it makes companies be aware of their social responsibility not only that it gives the company a good reputation.

    So as a consumer we could affect the way the company operates, to encourage good CSR practices and stamp out bad practices by buying less of their products. But in the case of Iceland you might want to decide to buy more of their products.

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  • Olivia-Avatar.jpg Olivia @ the BNC 03 Dec 2018 in reply to creative_sparrow's comment

    This comment made for a great read and is bursting with BNC skills. Well done! I especially like how you have shown curiosity in your research and scepticism where you've asked how the scores are calculated etc.
    How much do you think the end consumer considers the ethical principles of the company they are buying products or services from? Do you think this impacts their decision about who to give their money to and, if not, why not?

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  • The-Ruth-Gorse-logo-250x250.jpg creative_sparrow
    The Ruth Gorse Academy 03 Dec 2018

    Thank you for replying to my comment :D

    I think how much the end consumer considers the ethical principle is really down to how much they are informed. Even so, once they are informed do they care enough to think not to buy the products, even if they know the company has bad practices? It depends what their values are I think. If I was aware of a company’s bad ethical practice I definitely would think twice. Some people are inform anyway but may choose to buy it regardless because it’s a ‘must have’ and it’s a materialistic world.

    However, I know people may not have a choice, for example if they were poor, being ethical is probably the last thing on their mind because the needs of a family is more important. Also, maybe they just don’t have a lot of time or maybe they are too stressed and therefore they may not want to look up all the ingredients list on every shopping they do to see if it contains certain ingredients thats considered to be unethical e.g. palm oil.
    But for majority of people I think we should all care especially if we are inform.

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  • Morley-Newlands-logo-250x250.jpg tenacious_whale
    Morley Newlands Academy 04 Dec 2018

    Out of all of the choices to blame from I think that it was the government fault because they didn't give advise for the bankers and bosses to go by. If they did the bank would of been completely fine and on track but , because they didn't and let them do what they wanted there plans went wrong and because the government didn't know what they were doing it couldn't be sorted out . The government always give a policy to a shop that open's , which are basically rules that must be followed , because if they don't the shops might sell or do things that there not supposed to do to public .

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  • Emily 1.jpg Emily @ the BNC 04 Dec 2018 in reply to creative_sparrow's comment

    Hi creative_sparrow, I've given you a star for this comment because you thought in depth about all the different factors that might affect someone's choice, and that's the kind of curiosity we like to see BNC members applying!

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  • Elaine-logo-250x250.jpg victorious_snow
    Elaine Primary School 17 Dec 2018

    Even though there may be valid points to say everyone is to blame, if the question who is the one main person to balme appears, then I would say the government.

    This is because if we think in both sides of our points, yes it would be harder to pick out one main reason however the government actually stands out.We have to remember that it was a global crisis, so if we blamed the bankers or their bosses, it would be hard to imagine that every banker has made a fault in their career and it will be a larger group of people. The 188 countries members of the World Bank each declare a certain amount of money that they are willing to pay into the Bank. The3 the government acts similar in every countries. So their systems are likely to match eachother, this means the government, all at once, are giving out greater amount of loans, and so money is slowly fading altogether which will once again effect the economy.
    So if we blamed the public, I would say it wouldn't be fair because who said you can't borrow unlimited amount for money in following process of lenting which the government brought up. The public, under going with the rules anyway, used the opportunity and completed their wishes.

    This is my opinion and I think to over come this situation the world bank should unanimously collaborate about the impact that would appear if they created the littlest of changes to prevent this from further negative actions

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  • Tiff-Avatar.jpg Tiff @ the BNC 18 Dec 2018 in reply to victorious_snow's comment

    Well done for thinking about the global scale of the crisis.

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