- How the credit crunch affects you
- The credit crunch what went wrong
- Are your savings safe?
- Take control of your finances
- Personal loans
- Debt help

Can we be sure we won’t see another credit crunch again? The answer is undoubtedly ‘no’.

Financial markets never stand still and as long as this market is competitive there will continue to be products launched that potentially could lead to debt problems and ultimately the knock on effects we are currently witnessing in the banking sector.

This realistic picture does not mean that governments, financial institutions and the public can’t take action of sorts now to limit the chances of this happening again soon.

Few ever thought the Wall Street crash in 1929 could ever be repeated, yet here we are nearly 80 years later and the World is staring financial meltdown in the face.

But we can learn from history and from our own mistakes. In 1929 the position with the banks was worsened by the fact that banks were allowed to fail. This time around world governments have acted swiftly and hopefully we will benefit as a result.

Will tighter regulation help in the future? Certainly a well regulated mortgage market would be a step forward – self-certification or mortgages based on high earning multiples may be given the red card.

The sub-prime mortgage itself market may see far more safeguards on lending. A ban on short selling and the ability for hedge funds to manipulate the market is a possibility but it wouldn’t necessarily solve the problem.

Ensuring banks can prove they are sufficiently capitalised and monitoring this effectively would make a big difference.

Banks and building societies themselves may have learnt the hard way that to lend irresponsibly can lead to ruin. Perhaps post credit crunch companies will concentrate on sound business principles rather than be focussed on sales and bonuses.

Perhaps ‘nationalised’ banks can put a stop to some of the hefty bonuses paid out to top banking executives.

The public too should learn from what has happened. The banks are not solely responsible for what has happened – no borrower was forced against their will to sign up to a wholly unsuitable mortgage loan. Nor was anyone forced to run up huge personal debts via credit spending. Consumers should focus on what they can actually afford rather than what they can put on the plastic!

There has been a lot of talk about introducing personal finance onto the school curriculum. Most school leavers understand how to work out the area of a rhombus but have no idea what APR on a credit card is or how stock markets work.

It is to be hoped that going forward there will be a far greater focus on financial literacy.