Adair Turner

Senior Fellow
Institute for New Economic Thinking

Adair Lord Turner 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 now a Senior Fellow of the Institute for New Economic Thinking, and at the Centre for Financial Studies in Frankfurt.  

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.  

He is the author of 'Just Capital – The Liberal Economy' (Macmillan, 2001), and ‘Economics after the Crisis, (MIT Press, 2012), and holds Visiting Professorships at the London School of Economics and at Cass Business School, City University. He is a Trustee and Chair of the Audit Committee at the British Museum.

Lord Turner studied history and economics at Caius College, Cambridge.

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Lord Adair Turner, Former Chairman of the United Kingdom's Financial Services Authority & Senior Fellow at the Institute for New Economic Thinking

The 2008 financial crisis caused enormous harm. In most advanced economies output per capita is some 10-15% below pre-crisis trend: in several, median real wages are no higher than they were 10 years or even longer ago.

But even before the crisis, something seemed amiss in many advanced economies. The bottom quartile of American earners had received no increase in real wages for 25 years. And while the crisis resulted from two decades of rapid credit growth, that credit growth produced only moderate rather than exceptional output growth. We seem to be suffering a severe hangover, without even much of a party.

Over several decades prior to the crisis, private sector credit grew faster than GDP in most advanced economies, and leverage therefore grew. That growth in private leverage was a major cause of the crash of 2007 to 8, and the predominant reason why the post crisis recession was so deep and the recovery so weak and slow.

But pre-crisis credit growth did not result in inflation above central bank targets. And it appeared necessary to achieve reasonable growth in nominal demand and real output growth in line with potential.

Editor's Note: Welcome to Crash Week! This week marks five years since the bankruptcy of Lehman Brothers and the financial crisis that followed. A lot has happened since then, but how much has changed? All week long we will be exploring this question from a variety of economic angles. Below is the second piece from Institute for New Economic Thinking Senior Fellow Adair Turner. You can also check out the first entry from Institute for New Economic Thinking President Rob Johnson.

Originally appeared on

By Lucrezia Reichlin, Adair Turner, Michael Woodford, 20 May 2013

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In the wake of World War II, much of the western world, particularly the United States, adopted a new form of capitalism called “managerial welfare-state capitalism.”

The system by design constrained financial institutions with significant social welfare reforms and large oligopolistic corporations that financed investment primarily out of retained earnings. Private sector debt was small, but government debt left over from financing the War was large, providing safe assets for households, firms, and banks. The structure of this system was financially robust and unlikely to generate a deep recession. However, the constraints within the system didn’t hold.

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In Macroeconomics 101, you are taught about how the banking system in modern economies works. But as Institute for New Economic Thinking Senior Fellow Adair Turner notes in this presentation from the Institute’s recent conference in Shenzhen, China, the textbooks bear little relationship to the realities – in particular, the role that finance plays in our modern system. 

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Breakout panel on INET's Financial Instability Working Group at the Institute for New Economic Thinking's "Changing of the Guard?" conference in Hong Kong. Featured panelists include Dan Awrey, Co-Pierre Georg, Arie Krampf, and Alberto Russo, with INET Senior Fellow Adair Lord Turner moderating.

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INET Senior Fellow Adair Lord Turner delivers the day 1 keynote address at the Institute for New Economic Thinking's "Changing of the Guard? Conference in Hong Kong, with an introduction by George Soros.
Speaking during a session titled "Macroeconomic Policy and Economic Stability: Lessons of the Historical Experience with Fiat Money and the Implications for the Future," Turner lays out the case for Overt Monetary Finance.
His conference paper and presentation slides are attached below.
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INET Senior Research Fellow Adair Turner speaks about the importance of holding INET's "Changing of the Guard?" conference in Hong Kong and the link between inequality and technological change.