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Leading Economists Storm The Bastille Of High Finance:
The Future of Finance: and the theory that underpins it

14 July 2010

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 Economics (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.

The Future of Finance: The LSE Report
Published on August 16th at £14.99 in paperback
Order a printed copy of the book
Go to CEP Books web page

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 full list of authors and titles is attached. The titles demonstrate the breadth and depth of the study. 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.

The Conference will be held at on Wednesday 14 July 2010 (9.00 - 17.45) at Institute of Engineering and Technology, 2 Savoy Place, London WC2R 0BL [See Map]

The book launched at the Conference is ‘The Future of Finance: And the theory that underpins it' by Adair Turner and others. Available online from July 14th at http://www.futureoffinance.org.uk and available to press on request from now on.

Contact: H.Ogborn@lse.ac.uk for an electronic version. Tel: 020 7955 7048

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