Losing his deregulation religion

The chairman of U.K's top financial institution regulatory body says markets are no longer trusted


Andrew Leonard
August 27, 2009 10:50PM (UTC)

The Financial Times' Gillian Tett quotes Lord Adair Turner, chairman of the U.K.'s all-purpose financial institution regulator, the Financial Services Authority:

"[T]he whole efficient market theory, Washington consensus, free market deregulation system" was so dominant that it was somewhat like a "religion." This gave rise to "regulatory capture through the intellectual zeitgeist," enabling the banking lobby to swell in size and power.

But now, he says, there has been "a very fundamental shock to the 'efficient market hypothesis' which has been in the DNA of the FSA and securities and banking regulators throughout the world."

Hence, "the idea that more complete markets were good and more liquid markets are definitionally good" is no longer trusted. "[This crisis] requires a very major reconstruct of the global financial regulatory system, [not] a minor adjustment," he concluded.

Good. Glad that's settled.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

MORE FROM Andrew LeonardFOLLOW koxinga21LIKE Andrew Leonard

Related Topics ------------------------------------------

How The World Works

BROWSE SALON.COM
COMPLETELY AD FREE,
FOR THE NEXT HOUR

Read Now, Pay Later - no upfront
registration for 1-Hour Access

Click Here
7-Day Access and Monthly
Subscriptions also available
No tracking or personal data collection
beyond name and email address

•••





Fearless journalism
in your inbox every day

Sign up for our free newsletter

• • •