Radio Review

With its average weekly audience of 183 million people around the globe, the World Service has great responsibilities.

In part one of an excellent documentary, The Trouble With Money, it sought to explain just how serious the crisis in the US housing market is - in terms relevant to individuals, not just economists.

Presenter Michael Robinson went to California, where many homeowners are walking away from their mortgages, even if they could meet the monthly repayments, because their houses aren't now worth what they agreed to pay for them. Crucially, in much of America, if a mortgagee defaults, all the lender can do is repossess the property and sell it - they are unable to chase up any remaining shortfall.

"Isn't this a moral issue," queried Robinson, "you honor the debt you incurred?" Karen Trainer, a well-paid professional who borrowed $500,000 for an apartment now worth $250,000, was dismissive. "Will the bank pay for my retirement because I was a good girl and paid my mortgage? No, it won't." So the banks' deficits grow ever greater.

Some estimates say US lenders are facing losses of up to one trillion dollars.

The entire capital of the US banking system is only 1.33 trillion dollars.

It's bad all right.