posted on Feb, 19 2013 @ 02:24 PM
The problem does not necessarily lie with the banks... people take out massive loans from banks knowing exactly what the interest rate is putting up
their house as collateral, and then when they fail to pay back this massive loan the bank comes and seizes their house and they cry Injustice!
The problem lies with people who don't have a realistic picture of the world around them. They fail to consider risk factors and consequences when
taking out loans. So yes, I would agree, this stems a lot from arrogance.
You have to realize banks are a business too. When someone deposits money in a bank they recieve a small interest on their deposit. When a bank gives
out a loan, they want the money back sooner rather than later, so they place interest rates on the loan. If a bank did not charge interest rates,
people who take out loans would have no motivation to pay back the loan in a timely manner, and the bank could possibly run out of money and not be
able to pay out people who try to withdraw money from their deposits.
Interest rates exist because people are inherently not trustworthy, or at least that is the philosophy behind it. Banks can't trust people to pay
back on time, or pay back at all.