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Leading economists storm the Bastille of high finance

On July 14th, Bastille Day, twelve leading economists present their opinions of what is wrong with the world’s financial system – and how it should be radically reformed. They have been meeting at the London School of Economicsand Political Science (LSE) each month for a year, and a new book published today – The Future of Finance: the LSE report – draws together the various strands of their debate.

A key theme is that the scale of financial asset creation has been grossly excessive and far beyond the needs of the real economy – which is the ultimate touchstone of a healthy financial system.

The book includes new analyses of how finance affects the real economy, as well as, in some cases, radical reform proposals aimed not only at governments, but also at the giant funds that invest our wealth. The authors are all major figures in national policy or national debate:

Adair Turner, Chairman, Financial Services Authority

Andy Haldane, Executive Director of Financial Stability, Bank of England

Paul Woolley, Senior Fellow, Paul Woolley Centre for the Study of Capital Market Dysfunctionality, LSE

Sushil Wadhwani, CEO Wadhwani Asset Management

Charles Goodhart, Emeritus Professor of Banking & Finance, LSE

Andrew Smithers, Founder of Smithers & Co.

Andrew Large, former Deputy Director, Bank of England

John Kay, Visiting Professor, LSE

Martin Wolf, Financial Times

Peter Boone, Executive Chair, Effective Intervention

Simon Johnson, Professor of Entrepreneurship at MIT's Sloan School of Management, and Senior Fellow, Peterson Institute for International Economics

The first chapter is by Adair Turner, Chairman of the Financial Services Authority and a member of the G20’s Financial Stability Board charged with developing a global regulatory regime.

Adair Turner’s contribution argues that ‘There is no clear evidence that the growth in the scale and complexity of the financial system in the rich developed world over the last 20 to 30 years has driven increased growth or stability’, and identifies the most crucial problem as volatile credit supply and pricing arising from the interaction of banks, financial markets and real estate finance. His analysis defines the issues to which he and the other authors propose solutions.

The group was convened at LSE by the Paul Woolley Centre for the Study of Capital Market Dysfunctionality and by the Centre for Economic Performance (CEP).

At the Conference, the keynote address will be by Vince Cable, Secretary of State for Business, Innovation and Skills.

Ends

The Conference will be held at on Wednesday 14 July 2010 (9.00 – 17.45)
at Institute of Engineering & Technology, 2 Savoy Place, London WC2R 0BL
The book launched at the Conference is The Future of Finance: the LSE report  by Adair Turner and others. It is available to buy from 16 August at Central Books|

For further information, contact Romesh Vaitilingam, Email: romesh@vaitilingam.com Tel: 07768 661095

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