e-MFP, 30 September 2024
Consider this remarkable chart. It’s a rare testament of human progress, showing a 10x decline in traffic deaths alongside a 10x increase in driving – one could be forgiven for thinking that the more people drive, the fewer traffic deaths they’re likely to cause! Of course, nothing can be further from the truth. Behind this chart lies 100 years of evolution in traffic safety.
In 1900, you could drive a car the way you drive a bicycle today – assuming you could afford one, you got in and drove, using roads built for pedestrians and carriages. Road signs, speed limits, traffic signals – all arose during the next several decades. In UK, a system for testing and licensing drivers was put in place only in 1935. Safety devices followed later still, with seatbelts becoming common (and eventually mandatory) only in the 1960s, and airbags only towards the end of the century. In short, it was a century of continuous evolution.
There is an interesting pattern in this very brief history – the initial decades dealt mostly with prevention, with the goal of reducing traffic accidents themselves. Mitigation efforts like seatbelts and airbags – which explicitly accept that accidents will happen and focus on making them less deadly – these took decades longer. Perhaps this is the natural course of things: mitigation requires the years of experience and humility to accept that not everything is preventable.
When it comes to overindebtedness, this is where our sector’s client protection practices are today – stuck in the era of prevention, with not even the bare minimum when it comes to mitigation. As credit continues to expand, the inadequacies of the current system will become ever starker, with the entire system of client protection losing credibility in the process. And the only way to preserve and rebuild that credibility is to develop serious and effective measures to mitigate overindebtedness.
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