Some unscrupulous person sold my telephone to a bunch of telemarketers; I now get 3-5 calls a day from credit card companies, banks and sometimes finance companies based in Philipines who promise to double my money in 3 months if I just wire a few thousand to them. Of course, I won't fall for the filipino finance company ploy but the ones from the banks are quite seductive - low interest of 3.5% for 6 months, interest free loan for 6 months just pay 2.5% ....."Sir, you have $8K available from credit card why don't you transfer it at an attractive promotional interest of 14.5%"....I had to explain to the telemarketer that 14.5% is NOT an attractive interest rate but he told me that other customers are happily paying 24% on rollover debts which amounts to billions in Singapore....
Research shows that US banks make the biggest profits from rollover debts with high probability of default. The high risk loans with high incidence of default and bankruptciies are also the most profitable for banks. There is no incentive for banks to alleviate the situation.
Throughout history money lenders have to be contained by govt regulation...you cannot count on the self-control of ordinary citizens. Credit card debt is addictive like drugs and we don't rely on individual responsibility when it comes to drugs .....why then do we allow them to destroy themselves with debt? The consumer debt situation in USA, UK and S. Korea tell us we should not standby as debt devour our society. Counting on the banks to be ethical is like asking a tiger to be a vegetarian......if you don't watch them closely, they will 'eat' you....be it structured deposits, issuance of credit card debts, banks don't give us a reason to believe they can self-regulate.
It used to be that one bank is allowed to make unsecured loans of 3 months of a persons salary(6 months ..credit card + credit line)...now with so many banks allowed to operate here this limit is not useful. A person who overspends and addicted to debt simply goes to several banks to get more money. Banks love customers who can't pay up because they keep rolling over their debts and paying hefty interest.
An extraordinary govt should be able to safeguard the interests of its citizens over the interest of banks. Banks can be force to screen their customers more if the maximum interest is capped to say 15% and the maximum loan that a bank can extend lowered.