This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/6992450.stm

The article has changed 5 times. There is an RSS feed of changes available.

Version 0 Version 1
Chancellor warns on consumer debt Chancellor warns on consumer debt
(about 1 hour later)
Chancellor Alistair Darling has urged Britain's banks to take a more cautious approach to lending.Chancellor Alistair Darling has urged Britain's banks to take a more cautious approach to lending.
In an interview with the Daily Telegraph, Mr Darling said both lenders and borrowers needed to "think long and hard" about the risks involved.In an interview with the Daily Telegraph, Mr Darling said both lenders and borrowers needed to "think long and hard" about the risks involved.
He also suggested a return to "good, old-fashioned banking" and voiced concern over loan consolidation TV ads.He also suggested a return to "good, old-fashioned banking" and voiced concern over loan consolidation TV ads.
His comments come amid volatile markets and concerns about the scale of debt taken on by British consumers.His comments come amid volatile markets and concerns about the scale of debt taken on by British consumers.
The Chancellor told the Telegraph primary responsibility had to rest with individuals. The chancellor told the Telegraph primary responsibility had to rest with individuals.
Elementary bankingElementary banking
He said: "In crude terms they need to know who they're lending to, how much they're lending and what the risk is.He said: "In crude terms they need to know who they're lending to, how much they're lending and what the risk is.
"Now, that's elementary banking, one might think, but there are times when going back to good old-fashioned banking may not be a bad idea.""Now, that's elementary banking, one might think, but there are times when going back to good old-fashioned banking may not be a bad idea."
But Mr Darling made no suggestion government would intervene with tighter regulation of lending.But Mr Darling made no suggestion government would intervene with tighter regulation of lending.
Institutions themselves need to open their own eyes and be more honest Alistair Darling, ChancellorInstitutions themselves need to open their own eyes and be more honest Alistair Darling, Chancellor
"My starting point is that government can't stand on the shoes of borrowers or lenders," he said."My starting point is that government can't stand on the shoes of borrowers or lenders," he said.
"(Borrowers) need to ask themselves, 'can I repay this?' and lenders need to ask themselves 'if it goes wrong, can I get it back?'. People do need to think long and hard about this," he warned."(Borrowers) need to ask themselves, 'can I repay this?' and lenders need to ask themselves 'if it goes wrong, can I get it back?'. People do need to think long and hard about this," he warned.
But he did say the Treasury were looking into commercials - "the sort you see on daytime TV" - which encourage consumers in debt to consolidate their loans. But he did say the Treasury was looking into commercials - "the sort you see on daytime TV" - which encourage consumers in debt to consolidate their loans.
Experts have warned such schemes can actually push households further into debt.Experts have warned such schemes can actually push households further into debt.
'More honesty''More honesty'
He added that banks themselves may bear some of the responsibility for people getting into problems with debt they cannot handle.He added that banks themselves may bear some of the responsibility for people getting into problems with debt they cannot handle.
"Institutions have in some cases been prepared to lend to people without actually checking if they were ever going to repay it," he said."Institutions have in some cases been prepared to lend to people without actually checking if they were ever going to repay it," he said.
He also suggested the City and financial institutions should take a more sceptical approach to new and complex financial instruments which appear to offer spectacular rates of return.He also suggested the City and financial institutions should take a more sceptical approach to new and complex financial instruments which appear to offer spectacular rates of return.
Recent cases have shown such instruments have turned out to be backed by risky loans to sub-prime home-buyers in the USA. Recent cases have shown such instruments have turned out to be backed by risky loans to sub-prime home-buyers in the US.
He told the newspaper: "Institutions themselves need to open their own eyes and be more honest.He told the newspaper: "Institutions themselves need to open their own eyes and be more honest.
"When someone comes up with a fantastic way of making money they need to ask, how is this money being made and what are the risks?""When someone comes up with a fantastic way of making money they need to ask, how is this money being made and what are the risks?"