But in the US, having collateral was viewed as a sort of privilege mechanism. Mitt Romney's Dad George, in the very best of intentions, tried to make it to where "underserved" or "redlined" mortgage districts got more service in mortgages to counterbalance things.

The end result of the monster that became blew up in 2008, after people took it far, far, far too far.

The hard problems are hard, mainly because you can't see the effect of an action until it's far too late.

Calomiris/Haber wrote a book explaining this. Recommended.

We can resort to a sort of grumpy, Congregationalist/Calvinist mentality but then stuff goes undone and people are poorer. Value should come from value, not suffering.

>Loan goes bad, you take the collateral

Yeah, and in the most recent cases that was somebody's home, for which nabbing that collateral was controversial.

>Now banks think they can get rid of that concept too.

Banks are pretty good at assessing loan risk. You don't think so? Go try to get a small business or unsecured loan.