Financial Times
July 15, 2011
The populations of Greece and the Republic of Ireland are around 10.7 million and 4.2 million respectively. So when non-Greek and non-Irish banks and other financial institutions were busy lending money to the Greeks and the Irish didn’t they ever stop to ask: “Isn’t this rather a lot to commit to such small populations?”
In the case of Ireland, why was so much lent for property development? Who did they expect to occupy all the new property? Immigrants?
Earlier, when US banks and other mortgage providers were lending money to people on low incomes and committing them to increases in mortgage rates, did they ever have the sense (let alone the conscience) to ask: “How will all these poor people be able to keep up with the payments?”
When financial institutions were busy selling derivative instruments that they either did not understand (despite their fat salaries and bonuses) or suspected of being of questionable content, why did the institutional buyers not examine the exact nature of what they were buying? Or did they believe they could “pass the parcel” to more gullible people for a commission/profit?
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