oops, guess that poll question range was too wide, not specific enough

[netmouse]

For those who answered (some form of) Yes, a certain loan interest rate seems excessively high, the majority responded that "too high " starts between 5 and 25 %, and I'd like to see a breakdown on that. Please answer this question too!

[Poll #1343223]

Comments

[dagibbs.livejournal.com]

In the 1981-1982 time period, Bank of Canada rates peaked over 20%. (http://www.bcrealtor.com/d_bkcan.htm) That's what the central bank lends at -- retail rates, even for the best customers, are going to be higher than that.

I think the USA prime rate also peaked over 20% during that period. (http://research.stlouisfed.org/fred2/data/PRIME.txt)


Context still matters.

[netmouse.livejournal.com]

Retail rates are only necessarily going to be higher than that for institutions who borrow money from the Bank of Canada (or the US fed bank and, yes, we also peaked high in those years). There's nothing stopping independent people or institutions from undercutting the lending market. (If the prime lending rates get high, though, people start to get scared of losing money due to rampant inflation)

Are you saying you don't care how high the interest rate is if it's the government bank charging it? Ir just that you're trying to recognize that all financial institutions tend to operate off the prime rate?

[dagibbs.livejournal.com]

I think that it would be hard to see the "benchmark" rate as usury, and that usury probably has to be defined relative to that benchmark. I have a certain trust that the "benchmark" is not wildly off the mark, but that may not always be the case -- I will hope it is the case in honest, relatively open, stable economies.

And, the benchmark is (supposed to be) high because inflation is high... and again, it comes back to defining against inflation.

And, yes... who measures it? Ok, the difference between 2.5% and 3.7% -- might be tricky, and have to trust. But the difference between 2% and 20% -- that's going to be noticeable to everyone who buys stuff.