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    This letter from today's Guardian may assist in clarifying my insistence on the non culpability of the borrower in our present and ongoing financial 'mess'...

    "... the real cause of the financial crisis was the decision to discard a prudent accounting system in the mid-2000s. Until then, accounting in this country was based on the UK GAAP (Generally Accepted Accounting Practice), where profits could only be taken when they were earned. UK GAAP was replaced by IFRS (International Financial Reporting Standards), where assets are not valued at cost, but at "fair value", which is a theoretical valuation assuming favourable market conditions. This would not be so bad were it not for increases in theoretical asset valuations being taken as profit in the income statement. Thus unrealised profits are taken into the income statement from which bonuses are paid, although no cash has been generated to support them. Imprudent accounting is the real problem.
    Malcolm Howard
    Banstead, Surrey"

    From...

    http://www.guardian.co.uk/business/2012/jul/09/acceptable-face-banking

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