While the money is “your own” (or a lot of people’s) it’s money that you gave the bank to make money with. If you don’t want the bank to be making money off you or other people with your money, then keep everything invested in other companies or in a safety deposit box (or a sock, but a safety deposit box is safer for large amounts).

As for the other, I think there’s more involved in people making bad decisions than bankers forcing them into it. Bankers may not try to stop them and encourage them, but there are more societal forces at play in the situation. Emphasis on status & lifestyle, comfort with debt, jealousy, competition, and poor financial education certainly can’t all be laid at the feet of banks.

The money does not belong to the bank, it’s your own money being lent back to you (and mine, and other people’s). Or it’s the bank lending to unworthy customers at high rates and then selling the bad loan to unsuspecting investors.

The Islamic system is pretty neat because they still have banks and something like loans, but the banks are more like partners. As deepali mentioned, no interest can be charged under Shariah, so the banks lend money and become like principals in the business, or part owners of the house.

Anyway, I agree in the concept of interest and time value of money because it should direct money towards the most efficient use. However, you have to agree that people feel quite abused when they are sucked into buying homes at huge prices, that they can’t afford, by banks who have the power to totally destroy your life if you can’t quite work hard enough to pay the schedule they’ve given you. Of course buyers have choices, but not everyone is an expert. They go to bankers and realtors because bankers and realtors are supposed to be experts and you should be able to trust them.