Between Debt and the Devil: Money, Credit and Fixing Global Finance
November 19, 2015
6:30pm - 8:00pm
Adair Turner, Former Chair, UK Financial Services Authority
Matt Miller, Senior Vice President, Capital Strategy Research; Former Host, “Left, Right & Center”
When the financial crisis struck in 2008, households and businesses in advanced economies were so deeply leveraged that private-sector debt exceeded GDP in some countries. Was the growth of credit and private debt in decades leading up to the collapse a contributor to economic growth or a precursor to the meltdown?
Adair Turner was named chairman of the UK Financial Services Authority in 2008, just as the crisis was unfolding. His position at the FSA, and his role as chairman of the International Financial Stability Board’s major policy committee, gave him deep insight into the causes and consequences of the crisis.
At this Milken Institute Forum, the author of “Between Debt and the Devil: Money, Credit, and Fixing Global Finance” challenged the assumption that we need credit growth to achieve economic growth. In fact, Turner contends, excessive private-sector debt is one of the principal reasons the crisis was so devastating and the recovery so long. Turner offers a prescription to keep it from happening again: Manage the growth and allocation of credit through public policy, restrict real estate lending and tax debt as a form of “economic pollution.” He also offers a bold challenge to conventional central banking wisdom with a call for debt monetization to be part of the policy tool kit to assure stable growth, and to deal with huge debt overhangs around the world.
ABOUT THE AUTHOR
Adair Turner is the former chair of the UK Financial Services Authority, where he played a leading role in revising global banking and shadow banking regulation in response to the financial crisis. He previously served as vice chairman of Merrill Lynch Europe, was director general of the Confederation of British Industry and led McKinsey & Co.’s Eastern Europe and Russia practice. Following his tenure at the FSA, Turner joined the New York-based Institute for New Economic Thinking, where he is a senior fellow and chair of the governing board. Turner has has been a non-executive director of several companies, including Standard Chartered Plc. and Prudential Plc. He is the author of “Just Capital: The Liberal Economy” and “Economics After the Crisis.” He became a crossbench, or independent, member of the House of Lords in 2005.
ABOUT THE MODERATOR
Matt Miller is a senior vice president at Capital Strategy Research, a unit of Capital Group Inc., where he analyzes U.S. policy trends that affect investment decisions. Before joining Capital in 2015, Miller worked as a columnist for publications including the Washington Post and Fortune magazine, hosted public radio’s “Left, Right & Center” and was a senior fellow at the Center for American Progress. His first book, “The Two Percent Solution: Fixing America's Problems in Ways Liberals and Conservatives Can Love,” was a Los Angeles Times bestseller. His second book, “The Tyranny of Dead Ideas: Revolutionary Thinking for a New Age of Prosperity,” was published in 2009. He was a senior advisor in the White House Office of Management and Budget from 1993 to 1995. He holds a B.A. in economics from Brown University and received a law degree from Columbia Law School.