Are the banks then responsible for over-indebtedness?
Baumann: To some extent they are. The banks don’t do it on purpose – at least I’m not aware of any bank interested in clients unable to pay due to over-indebtedness. Often it is simply due to a lack of information, which has to do with restrictions written into consumer protection laws. In many cases for example, we have a range of data about debtors that we are not allowed to forward to banks due to protection laws. So the regulators are to blame? Baumann: No, that’s not it at all. I’m just saying that circumstances can sometimes make it difficult for lenders to make the right decisions. Most banks employ statistical models in their loan awarding decision-making, but these are only as good as the data employed. But statistical modeling was surely not responsible for the US credit crisis. Baumann: No, systemic problems were to blame for the crisis. Banks securitized risks and sold them off. In the end, no one knew anymore where or how great the risks were. Have you ever bought a televi
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