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Comment by skh | Hacker News Reader

Lending is a two party interaction. Both sides have responsibilities and not holding German banks responsible for their profligate lending is bad. It is well known what happens when a country is flooded with credit at low interest rates. You shouldn’t just blame on party of the two party interaction.

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While this is true, the borrower is going to know their financial situation better and have somewhat more control over it, so it would make sense to blame them more.

Lenders are free to deny loans.

There's economic research that shows it's more efficient to regulate (in some sense, "blame") the lenders, because borrowers are often desperate. When you're desperate, you have reduced capacity to objectively judge the consequences of borrowing and are also less sensitive to "blaming", potential penalties for overborrowing, etc. From this perspective, putting all the blame on borrowers while exonerating the banks is exactly the opposite of what we should be doing as a society, if we want to avoid another debt bubble.

I'd fully agree with you if we were talking about small entities. Maybe we can not expect every citizen to fully learn the details and pitfalls of all those financial constructs available and thus want to protect them with regulation. But when we are talking about nation-states... whom else can we expect that kind of due diligence from to make properly informed decisions and understand the consequences if not governments of nations, representing millions of people?

Lets imagine some democracy votes an incompetent fool into their highest office, who starts making "bad deals". Would you expect other countries to not agree to those deals for reasons other than their own interests?

> Lending is a two party interaction.

Actually, it's not. Borrowing money is the sole responsibility of the borrower, who decides how much money he wants to borrow based on the impact it will have on their finances.

For a loan to materialize, the borrower needs to be aware of how much it will cost him and for how long he will have to repay or service the loan.

That's all the borrower's responsibility.

Only after the borrower is aware of the immediate and long-term impact of his actions will the borrower petition a lender to execute the loan. The lender's only role in the deal is to double-check the borrower's assumptions to ensure the borrower is actually capable of keeping his word and pay back the money he is borrowing.

It's also extremely disingenuous to criticise higher interest rates as they are a safety mechanism that reflects the borrower's ability to repay future loans, and are supposed to act as pressure to dissuade the borrower from digging himself into a finantial hole.

> You shouldn’t just blame on party of the two party interaction.

That's simply wrong on so maby levels. The only part who holds any form of responsibility is the borrower. He's the one making the decision to ask for more loans being fully aware of his financial situation and the impact the new loans have on his cash flow. He is the only part of the arrangement who actively petitions for the deal and has full and complete access to his economic state. The borrower is the only part who has the legal power to sign on the loands. The borrower is the only part who actively seeks the loans and actively engages with each and every single lender in the world to fulfill his desires for more debt.

Today I learned that lenders cannot deny loans, poor souls forced to give money away to everyone that asks for it, without any kind of background checks.

> Today I learned that lenders cannot deny loans

Lenders can deny loans and they can also reflect the risk in the interest rate. However, lenders only provide their input after the borrower evaluates the impact of a loan on their finances and decides based on his evaluation that he clearly and unambiguiusly is willing and capable of servicing and repaying such a loan in full. Only after that decision is expressly made by the borrower can lenders be involved, and their involvement is restricted to rubberstamp the deal decided by the borrower.

How silly of me to think that it was the lender's responsibility to access the possibilities to get the money back.

Love these capitalism excuses.

Give money away, no questions asked, blame the borrower.

Your belief about the state of knowledge of borrowers is wrong. I teach mathematics at a community college and it is clear that a knowledge of percents and the impact of compounding is lacking in a large portion of the population. In my state a state senator once claimed that since funding to the college system was increased 5% after a 5% decrease this meant that the college system’s funding had been fully restored. Do you understand why this indicates that the state senator doens’t understand percents? Do you see the error? Most people don’t.

There are lots of cases where borrowers do not understand all the terms of the loan. Have you read and understood every single loan document you’ve signed? I doubt it. Your belief that only the borrower actively seeks loans is can easily be dispelled by watching TV and seeing ads for loans.

It’s hard to understand how you can write

Borrowing money is the sole responsibility of the borrower...

And the write

The lender’s only role in the deal is to double-check the borrower’s assumptions to ensure the borrower is actually capable of keeping his word and pay back the money he is borrowing.

It's not the lender's responsibility to concern itself with the consequences of the lending for the borrower. I understand the impulse to hold people to act with more care for others, but I think it's ultimately counter-productive to absolve the party that is fundamentally the only one responsible of their responsibility for their predicament. This is a government when we're talking about, not a child.

And yet it’s also children’s lives we’re talking about; not just the government. Country-scale things like this are difficult to boil down.

It's those childrens' parents that are responsible for empowering a responsible government, not German parents.

I mean we can blame the Germans, but it's not going to change anything. Borrowers will find someone to lend to them. It's only the borrower who can avoid getting under crushing debt.

If the leader is willing to give money to someone that they know isn't able to pay back, then they surely are to blame.

That depends. Usury is a counter example. There's a reason loan sharks are viewed with disdain. That isn't to say the borrower doesn't bear any responsibility, but consent, apparent or real, is insufficient to categorically absolve the lender.

It is the lender’s resposibility (and the govrernment’s responsibility to regulate lenders) when said lenders can loan enough money such that that economy is wrecked if the loans are paid back. Making one bad loan is not a problem. Making millions of bad loans that endangers the economic well being of a nation is a problem.

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