London Met’s Alumni Association holds topical seminar examining the current economic climate
4th May 2009
London Met’s Alumni Association recently held a topical seminar examining the current economic climate. Nirmala Lee, Senior Lecturer in Banking and Financial Services at London Metropolitan Business School (LMBS), gave a presentation entitled The Credit Crunch: Is it due to irresponsible lenders or illiterate borrowers?
The theme was framed as a whodunit question with pictures of ‘suspects’ presented to the audience for identification including well known figures such as Fred Goodwin, Adam Applegarth and James Crosby, as well as less well known characters such as Matthew Cox who was jailed for multiple mortgage fraud.
Did irresponsible lenders ’kill off credit’ with their flawed remuneration schemes and poor lending practices? Or were Illiterate, ignorant and apathetic borrowers to blame for irresponsible and excessive borrowing? Is there anyone else to blame? What about the regulators, hedge funds or taxation incentives?
Nirmala summised: ‘there are always winners and losers. In the legal case where local authority pension funds are suing RBS (both owned by the government), the loser is the taxpayer and the winner is the lawyer. Among borrowers, the fixed rate holder may be the loser, and the variable rate borrower the winner.’
Nirmala was engaged in bank lending for many years and has subsequently been researching financial literacy among bank consumers. She is the author of Principles of Lending and co-author of the National Research and Development Centre for adult literacy and numeracy (NRDC) Research Report Financial Literacy Education and Skills for Life. She is also an active member of the Financial Services Authority (FSA) / National Institute of Adult Continuing Education (NIACE) Advisory Group on Financial Literacy for Older People.