Summary

The financial crisis that began late in the summer of 2007 and has grown into the greatest economic crisis after the Great Depression is directly related to the growth in the general debt burden, including that of natural persons. Many governments and legislators in Europe must now resolve the problems that are a consequence of overborrowing. A number of initiatives have been launched to restore faith in the financial system, preserve the internal market and restore the stability of the loan market, bearing in mind the systemic nature of the crisis, its macroeconomic effects and the interdependence of the financial sector. The European Commission has also initiated a public debate on application of the principle of responsible lending and borrowing in the hope that this may contribute to resolving the problem of overborrowing.

In the first part of the article, the author provides an overview of the development of the principle of responsible lending and borrowing in European law. In the subsequent section, the author analyses the essence of this principle. The principle of responsible lending and borrowing has been provided for in Estonian banking law since 1 January 2007. In the third part of the article, the author examines the definition of the principle of responsible lending and borrowing in Estonian law, as well as the purpose and interrelationships between the relevant provisions of the Credit Institutions Act, the Law of Obligations Act and the Consumer Protection Act.