Lord Adair Turner was made Chairman of Britain’s Financial Services Authority just as the global financial crisis hit in 2008. Since then he has played a leading role in redesigning the global financial regulatory system. In his new book, ‘Between debt and the Devil’, he sets the record straight about what really caused the crash – our addiction to private debt.
Lord Turner challenges the belief that we need credit growth to fuel economic growth, and that rising debt is ok as long as inflation rates remain low. Moreover, he argues that most credit is not actually needed for economic growth, and is more likely to drive unsustainable real estate booms and busts, financial crises and depression. He goes on to explain why public policy must manage the allocation of credit creation, and why debt needs to be taxed as a form of credit pollution.
Paul Volcker – former chairman of the U.S. Federal Reserve – describes Turner’s book as ‘A masterwork! Insightful, scholarly, and persuasive. Adair Turner has provided a convincing analysis of what has gone wrong before, and what could go wrong again, among the intertwined complexities of money, credit, and misguided theories of finance.”
If you would like to book Lord Adair Turner for a conference or event please get in touch with firstname.lastname@example.org
Lord Adair Turner is one of the world’s most influential experts on global economic trends, finance, and macro prudential regulation. Speaking with Leo von Bülow-Quirk at Chartwell, Adair discusses the key messages behind his forthcoming book – “Between Debt and the Devil: Money, Credit, and Fixing Global Finance” (Princeton, October 2015).
Adair argues that whilst incompetent bankers and people who acted irresponsibly played a part in the 2008 financial crisis, the fundamental reason for the meltdown can be attributed to the extraordinary growth of private sector debt (both company and household) over the 60 years leading up to the crisis. He contends that most credit is not needed for economic growth, but rather drives real estate booms and busts and leads to financial crisis and depression.
In this podcast, Adair draws from his new book to outline why this build up of private debt was bound to produce a major financial crisis and difficult post-crisis recession.
For more information on how to book Adair Turner as a speaker for your conference or client event, please get in touch with Leo von Bülow-Quirk at email@example.com or call on +44 (0) 20 7792 8000.
Professor Joachim Voth has written a fascinating public paper for the UBS International Center of Economics in Society. Entitled “Fear, Folly, and Financial Crises”, Joachim draws lessons from history to argue that appropriate regulation can curb the frequency of financial crises. Crises are not, as is commonly thought, the inevitable result of everyone becoming irrational every few years. The key points are:
(1) Financial repression through regulation can prevent crises, but this comes at the cost of low growth.
(2) Therefore having no financial crises is not a good thing. The optimal number of crises is not zero.
(3) Lessons from history can help policy-makers deal with crises (e.g. the response after the 2007/08 crisis was guided by the lessons learnt when analysing the mistakes made by policy-makers in the 1930s).
(4) The severity of sovereign debt crises can be reduced by lowering banks’ exposure to sovereign debt, making risk transfers effective, and by writing contingency debt contracts (which would reduce the pro-cyclical nature of fiscal policy during crises).
(5) The frequency and size of bubbles can be reduced by avoiding short-selling restrictions, only allowing shares to come to market when the company is mature, and allowing large numbers of shares to be traded with ease.
For more information, or to book Joachim Voth as a speaker for next event, please contact Leo von Bülow-Quirk at firstname.lastname@example.org or call 0044 (0) 20 7792 8000.