Of bread and bankers...

As a rule we offer debt advice to individuals, not businesses – and certainly not the Chancellor of the Exchequer.

But just occasionally a comment intended for the Government’s economists resonates within our sphere.  One such came from Dirk Bezemer, an associate professor at the University of Groningen in The Netherlands, writing in the Financial Times.   He said:  “Banks create debt much as bakers make bread.”

Such an arresting image – and so true.  Campaigners like ourselves who call for simplicity and transparency in financial services spend a great deal of time trying to explain that loans are products that are bought and sold like any other – but rarely has it been expressed quite so clearly.

His comparison was part of an argument that our financial sector is too big: “We cannot reduce our bread consumption and expect all bakers to stay in business. If we want to bring down our debt levels, we cannot avoid shrinking the financial sector.”

So – if we want to reduce debt levels, we should reduce the number of companies trying to lend us money.  Now there’s a thought...

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