Evening talk

Tuesday 20 October 2015

18:30

Adair Lord Turner

Between Debt and the Devil

Between Debt and the Devil challenges the belief that we need credit growth to fuel economic growth, and that rising debt is okay as long as inflation remains low. In fact, most credit is not needed for economic growth – but it drives real estate booms and busts and leads to financial crisis and depression. Turner explains why public policy needs to manage the growth and allocation of credit creation, and why debt needs to be taxed as a form of economic pollution. Banks need far more capital, real estate lending must be restricted, and we need to tackle inequality and mitigate the relentless rise of real estate prices.

Turner also debunks the big myth about fiat money – the erroneous notion that printing money will lead to harmful inflation. To escape the mess created by past policy errors, we sometimes need to monetize government debt and finance fiscal deficits with central-bank money. Between Debt and the Devil shows why we need to reject the assumption that private credit is essential to growth and fiat money is inevitably dangerous. Each has its advantages, and each creates risks that public policy must consciously balance.

Adair Turner is the Chairman of the Governing Board for the Institute for New Economic Thinking. He has combined careers in business, public policy, and academia. He became Chairman of the United Kingdom Financial Services Authority as the financial crisis broke in September 2008 and played a leading role in the redesign of the global banking and shadow banking regulation as Chairman of the International Financial Stability Board’s major policy committee. He is a Senior Fellow at the Centre for Financial Studies in Frankfurt and has served as Senior Fellow for the Institute for New Economic Thinking.

Prior to 2008, Lord Turner was a non-executive Director at Standard Chartered Bank (2006-2008); Vice Chairman of Merrill Lynch Europe (2000-2006); and, from 1995-1999, Director General of the Confederation of British Industry. He was with McKinsey & Co. from 1982 to 1995. Lord Turner became a cross-bench member of the House of Lords in 2005 and was appointed Chair of the Climate Change Committee in 2008, stepping down in 2012; he also chaired the Pensions Commission from 2003 to 2006, and the Low Pay Commission from 2002 to 2006.

"What's novel in Turner's book is not the proposition that debt can be dangerous, but that debt is what modern financial systems naturally create; and always to excess."

The Independent