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SCOTT JAGOW: You might remember, last year, Congress toughened the bankruptcy laws in this country. Some felt it was too easy for people to dodge their debt. Well, in Britain, they went the other way and softened up the law. Britain’s largest bank says that was a bad move. Stephen Beard reports from London.

STEPHEN BEARD: In a bid to capture more of America’s entrepreneurial spirit, the UK shook up its insolvency laws. It removed some of the stigma of bankruptcy making it easier for people to walk away from their debts.

HSBC says that has fuelled a big rise in its provisions for bad debts, up by more than $178 million in the first half of this year.

Ed Mayo of the National Consumer Council says the more lenient approach to bankruptcy was not a good idea.

ED MAYO: Liberalizing bankruptcy laws is part of an overall set of signals that says that over-indebtedness is an acceptable way of carrying on.

Debt counselors say the banks are also to blame because of profligate lending. In one recent case a couple earning only $5,000 a year were able to run up credit card debts of almost $1 million.

In London, this is Stephen Beard for Marketplace.