As long as the borrower has not misled the lender at the time of taking the loan, the lender bears at least some responsibility for the transaction.

In the lender s view, the 17 interest rate that Greece s government now has to pay for its 10 year bonds accurately reflects the lender s risk in buying Greek government debt.

Lender B agrees to provide a revolving loan facility to ABC to finance this process.

The seller retains title or the lender is granted a security right in the tangibles purchased to secure the repayment of the credit or loan.

ABC also maintains a bank account with Lender A and has granted Lender A a security right in the bank account as additional security for the repayment of the loan.

ABC obtains a loan from Lender A to finance the purchase of the drill presses from Vendor B, secured by a security right in the drill presses.

ABC obtains a loan from Lender B to finance the purchase and installation of the conveyor equipment from Vendor C, secured by a security right in the conveyor equipment.

But there is a contrary moral attitude, the essence of which is that, whereas excessive debt is to be deplored, the blame for it lies with the lender, not the borrower.

Banks could take on overly risky projects without scaring off investors because the government would step in as the lender of last resort.

These problems can become particularly acute in an economy without an effective lender of last resort and or one that issues only domestically denominated debt.

It will be as with the people, so with the priest as with the servant, so with his master as with the maid, so with her mistress as with the buyer, so with the seller as with the creditor, so with the debtor as with the taker of interest, so with the giver of interest.

And it shall be, as with the people, so with the priest as with the servant, so with his master as with the maid, so with her mistress as with the buyer, so with the seller as with the lender, so with the borrower as with the taker of usury, so with the giver of usury to him.

In this type of financing, it is also common for the lender to obtain a security right in the bank account into which customer payments (i.e. the proceeds of inventory and receivables) are deposited.

ABC obtains a loan from Lender C to finance such acquisition. The loan is repayable in equal monthly instalments over a period of ten years and is secured by existing and future assets of ABC and the entity being acquired.

When banks make loans, they create deposits for borrowers, who draw on these funds to make purchases. That generally transfers the deposits from the lending bank to another bank.

No new money will be available unless the lender is prepared to take the risk of lending without security or unless it can be obtained from sources such as the debtor's family or group companies.

The financial crisis of 2008 came close, but it was precisely the Fed s readiness to step in as an emergency lender that prevented the worst.

Likewise, they now recognize that bailout loans that give the new lender seniority over other creditors worsen the position of private investors, who will simply demand even higher interest rates.

You're required to write out a living will that details exactly how you'll pay the bills if you fail because the rest of us are not bailing you out ever again.

In the absence of enabling or clarifying treatment in the insolvency law, the provision of finance in the period before commencement of the insolvency proceedings may also raise difficult questions relating to the application of avoidance powers and the liability of both the lender and the debtor.

Where the lender requires security, it can be provided on unencumbered assets or as a junior or lower security interest on already encumbered assets where the value of the encumbered asset is sufficiently in excess of the amount of the pre existing secured obligation.

Some insolvency laws provide, for example, that where a lender advances funds to an insolvent debtor in that period, it may be responsible for any increase in the liabilities of other creditors or the advance will be subject to avoidance in any ensuing insolvency proceedings.

It is no coincidence that the US has not had a 1933 style financial crisis ever since. The financial crisis of 2008 came close, but it was precisely the Fed s readiness to step in as an emergency lender that prevented the worst.

The last legal restrictions on taking interest on money were lifted only in the nineteenth century, when they succumbed to the economic argument that lending money was a service, for which the lender was entitled to charge whatever the market would bear.