From The Flow of Value blog:
"All investments are made with surplus value (some of which has been borrowed to be invested), which has been netted out of the flow of value by those who produce more than they consume. This stock of value is commonly known as wealth. But governments and borrowers are consuming more than they produce, and as such are consuming from this wealth accrued by others."
Part of the problem is that those who produce more than they consume stupidly lend to those who consume more than they produce. If the lenders only lent to those legitimately aiming to increase value by starting/expanding businesses (real wealth creation) would we be in the problem we are?
However, few can directly lend to productive members of society. That is the function performed by bankers as they are supposed to intermediate between lender and borrower, doing the checks on the borrower the lender does not have the skills or time to do.
However, the banks haven't been productively lending as proven by Money Morning who show, as an example, an Australian bank (ANZ) is currently lending 59% into the residential mortgage market compared to 25% in 1978, when they were lending a far bigger proportion to wealth creating business. As Money Morning says:
"In 1978, total lending to the business sector made up over half of all the bank’s lending. Yet today it’s a pathetic 17%. ... The result is less credit flows through to business, including entrepreneurial business. It means just as private enterprise can be crowded out by government spending, private enterprise can be crowded out by a misallocation of resources by retail banks."