13 September 2007
The Chancellor has called for a return to "good old-fashioned banking" in a response to the UK's rising debt levels.
In an interview with the Daily Telegraph, Alistair Darling said he believed banks must demonstrate more responsibility towards whom they loan money to.
He said that both lenders and borrowers should think "long and hard" about the risks involved in taking out a loan.
"My starting point is that government can't stand on the shoes of borrowers or lenders," he said.
He also 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.
"Institutions have in some cases been prepared to lend to people without checking if they were ever going to repay it.
"It doesn't do any good for anybody, particularly the person in debt but also the lender, to be getting into a situation where you have bad debts," he added.
Earlier this week, Citizens Advice (CA) revealed that debt problems in the UK have reached record figures, with some 1.7 million people seeking advice on debt matters from its advisers last year.