Debt Deliberations

 

Debt is a bit of a tricky one in the UK.

 

On the one hand……our economy is very reliant on consumer spending and the Government would ideally like us to spend our money and also money that we don’t have as well.

 

On the other hand……spend too much of what we don’t have and the whole system comes tumbling down and has a negative impact on the economy.

 

It’s about getting the balance right……and we are reliant on the Banking Sector to get it right by making the right judgement on who gets credit and how cheap it is. And there lies the problem……we are having to trust the Banking Sector.

 

Fear not though as we have the Financial Conduct Authority (FCA) keeping a close eye on things……which makes the regulator’s comments all the more concerning currently. FCA chief executive Andrew Bailey said “there has been a big increase in consumer borrowing, such as loans, overdrafts, credit card debt and car finance. Personal debt levels are high enough to merit the whole sector coming under the microscope.”

 

Clearly, the Government will be happy that cheap and very accessible debt from the Banking Sector is fuelling economic growth. Economic prosperity is always a nice story to tell for a political party leading up to a General Election.

 

Forget the political spin though……at what point do we reach the tipping point again?

 

Can we trust the Banking Sector to identify it?

 

Can we trust the regulator to identify it when the Banking Sector doesn’t?

 

Interesting times.