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Between Debt and the Devil: Money, Credit, and Fixing Global Finance

4.03  ·  Rating details ·  200 ratings  ·  34 reviews
Adair Turner became chairman of Britain's Financial Services Authority just as the global financial crisis struck in 2008, and he played a leading role in redesigning global financial regulation. In this eye-opening book, he sets the record straight about what really caused the crisis. It didn't happen because banks are too big to fail--our addiction to private debt is to ...more
Hardcover, 320 pages
Published October 20th 2015 by Princeton University Press
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4.03  · 
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Zhi Wei Lee
May 10, 2017 rated it really liked it
To simplify, Turner's central hypothesis is "too much private debt inevitably leads to financial crisis". This is nothing new if you are already broadly familiar with the topic of financial crises. Notwithstanding that, the book is still worth the read for three reasons: (1) the quality of Turner's analysis (particularly in diagnosing the problem), which showcases his experience as both a practitioner and scholar; (2) the range of ideas and empirical evidence used; and (3) Turner's relatively ra ...more
Gumble's Yard
Jan 04, 2017 rated it it was ok
Shelves: 2016
Turner’s key thesis is that left to their own devices, margin funded banks inevitably over time produce excessive levels of private credit and hence debt, which is allocated inefficiently (typically to inflating real estate values rather than to increasing overall economic worth or production) leading not just to booms and busts, but to lengthy post-bust recessions due to debt overhangs. He also argues that (particularly due to issues of growing global imbalances and income inequality), the leve ...more
Athan Tolis
Nov 30, 2015 rated it it was ok
Shelves: ec-and-finance
The literature surrounding the Financial Crisis of 2008 comes under two categories: (i) blow-by-blow accounts of the story as it happened and (ii) books that seek to understand how it came about. It is obviously the latter that one must turn to when it comes to exploring what we need to do from now on, and Adam Turner, who ran the UK Pensions Commission until 2008 and the UK Financial Services Authority for the next six years is uniquely placed to answer the question, because he not only lived t ...more
Breakingviews
Oct 23, 2015 rated it really liked it
By Peter Thal Larsen

Scattered throughout Adair Turner’s “Between Debt and the Devil” is a little word that rarely features in most books about finance. The word is “we”. Its repeated appearance is a reminder that Turner is not just analysing the malaise of post-crisis economic policymaking: he is campaigning to upend the consensus.

In the opening chapters of this lucid and forcefully-argued book, “we” refers to the central bankers, regulators and other policymakers who battled to save the financi
...more
Grahamshircore
Mar 25, 2017 rated it it was ok
Some interesting ideas and discussions but a little biased in assessing the merits of his own ideas and my god the amount of padding and repetition! You could write this in ten pages without losing any of the content/concepts.
Weibo  Xiong
Aug 25, 2017 rated it it was amazing
Shelves: economics, history
A central bank chooses to print money to finance public expenditure and monetise government debt. Does that sound crazy and dangerous? Not necessarily, according to Lord Adair Turner. If an economy is facing debt overhang and weak nominal demand, then it would be a lot more dangerous to spur the economy through private credit expansion, since there will always be inherent instabilities along the credit cycles. Therefore, we should have second thoughts between the options of debt and the devil (m ...more
Luc
Turner wrote a good ex post analysis of the Great Recession of 2007-2009 with an agenda to introduce some proposals to cope with the relative state of ''secular stagnation'' prevailing in the industrialized world. Secular stagnation might be defined as a state of chronically deficient demand and low inflation bring about by high debt level and deleveraging (pp. 14-15). The author main argument to explain the world financial crisis is that financial deregulation in the industrialized countries si ...more
Sid1983
Apr 03, 2017 rated it really liked it
Shelves: purchased-sfpl
Easy to read book, divided into parts and subsections

Ultimately It's striking the balance between debt creation on the one hand the devil -- the imbalance created by monetary policy. MP can be good in small doses but when taken to an extreme it leads to its own set of issues. So instead of completely shying away from it, it's possible to have institutional levers to constrain the creation of credit in the formal and in the private sector. And these do need to be institutional levers -- financia
...more
Nishant Shah
Oct 31, 2018 rated it it was amazing
This requires some effort to read - quite technical at times and the author doesn't even try to dumb it down for non-eco people. It challenges all the micro and macro eco you learn in classroom books and provides a new lense to see the financial turmoils the world economy has so grown used to.

Highly recommended for all those curious about economics and banking in general.
Liam Robinson
Jun 14, 2018 rated it really liked it
In regard to private debt creation, Turner provides a very strong argument against conventional economic wisdom and highlights the keys flaws in recent economic policy. Yet I find his argument for monetisation weak- I would have preferred Turner to explore his proposed solution in more depth.
Eric Bottorff
Jul 03, 2017 rated it it was amazing
Some familiarity with economics and finance is recommended before jumping into this. But easily one of the best and most thoughtful books on macroeconomic theory, financialization, and the financial crash I've yet read.
Shane Hill
Apr 08, 2018 rated it really liked it
Great read on various economic issues that continue to plague us in the Western World.....
Weiching Liu
Jul 30, 2018 rated it really liked it
A refreshing take on debt's role in our society. A bit dry and repetitive at time.
Per Johansson
Sep 02, 2019 rated it really liked it
Shelves: economy
Great content, could have been better written. Quite repetitive arguments
M.R. Raghu
Mar 06, 2017 rated it really liked it
Amazing book. Provides a great foundation for understanding debt, money, credit and global finance. Truly a knowledge oriented book.
NguyenBinh
Dec 19, 2018 rated it really liked it
This review has been hidden because it contains spoilers. To view it, click here.
Tobias
May 31, 2017 rated it really liked it
Iconoclastic, smart writing on credit, banking, debt, and inflation. Not sure he successfully makes the case for monetization - does a better job explaining why private money creation is problematic.
Nancy
Jul 06, 2017 rated it it was ok  ·  review of another edition
Shelves: goodreads
I won this in a Goodreads giveaway.

After 3 months this finally arrived and I should have used that time to brush up on my college economics. It was a rough go and without knowing enough I can't say the ideas are good or not. I am handing it off to someone who has more of a finance background and hopefully they will have a better understanding of what the author is saying.
Adrian Buck
Nov 13, 2015 rated it it was amazing
Shelves: pol-econ
It's been twelve years since I read Just Capital: The Liberal Economy and I have been impatiently waiting to read his next book, this one. He is simply the most compelling writer about economic issues that I have discovered. This is perhaps because of the admirable way he combines his experience as a practitioner with his knowledge as a scholar. He makes me want to read more about economics. In this case, I want to more about the Japanese economy since 1991, more about the Irish Economy since 20 ...more
Darren
Dec 06, 2015 rated it it was amazing
An interesting book that certainly will have a few people upset, challenging the “conventional wisdom” that we must have credit growth in order to generate economic growth. The author is the former head of Britain’s Financial Services Authority and he took over the hot seat just as the 2008 financial crisis struck and he had a front-row seat in helping redesign global financial regulations and work towards getting the ship back on an even keel.

The author believes that the endless credit growth a
...more
Ben Irvin
Nov 15, 2015 rated it really liked it
Shelves: economics-read
Book 2 in my series on today's macroeconomic challenges. I had recently been thinking that there is something fishy about debt. How when too much of it builds up in an economy it causes a slowdown (recession). Wondering why we get to a place where the people who need and want to spend money don't have it, and the people who do have it don't want to spend it. Since it is (put simply) the circulation of money that keeps people employed and provisioned, the dynamic that creates growing indebtedness ...more
Vincent Weir
Oct 01, 2017 rated it liked it
A thought provoking guide to macro economic policy ideas post Basel III. Best suited for philosophers willing to wade through the slough.
Bilal Hafeez
Feb 08, 2016 rated it liked it
Adair Turner was the head of the UK bank regulator from 2008 to 2013. Before that he was Vice Chair of the US investment bank Merrill Lynch and a non-executive director of Standard Chartered. Outside of finance, he was head of the UK business lobby group, the CBI and before that at McKinsey.

The book devotes a lot to the pre-2008 environment, whether the Washington Consensus view or the acceptance of finance as good. Adair's main thrust is that there should be less private sector credit creation
...more
Eddy J. Schuermans
Dec 08, 2016 rated it really liked it
A great story about the financial crisis of 2008 that should never have taken place according to leading economists and policy makers at that time. In essence a story about human hubris believing that complexity and uncertainty can be managed through human created decision models. The author also describes the root causes of the crisis and in summary one could argue that the Central Banks turned off the alarm system without addressing the real fire i.e. debt overhang. Even worse, it is clear tha ...more
Sid Johnson
May 26, 2016 rated it it was amazing
Shelves: box-22
A couple of writers recently have talked about the importance of getting the narrative right about the financial crisis of 2008 and the follow-on anemic recovery, particularly because that narrative needs to inform policy. There have been many books and articles written on the subject. What I've noticed is that most of the ones I have read have either not matched the evidence or seem to have gaping holes.
If that has been your experience, look no further. Adair Turner spells out exactly what ha
...more
Kishan
Good book exploring some very important themes, I have a feeling this book will always be salient so long as we continue to ignore its core arguments: that the financial system is currently inherently unstable and prone to crisis.

Turner could do a bit better in terms of explaining some terminology, such as definitions and backgrounds of various financial instruments, before talking about them. Each Chapter refers to several other Chapters in between which makes it feel a little all over the pla
...more
Stan DeGroote
Jul 05, 2016 rated it it was amazing
On the dust-jacket Paul Volker calls this "A masterwork!" and I humbly concur.

This is the best update on current economic policy options and challenges that I've seen since the Great Recession. And well written to boot.
Aurelija
Nov 24, 2015 rated it it was amazing
Shelves: recently-read
"The general point still stands: optimal social and economic policy can never focus simply on the ideal solution but is always dependent on the starting point."
Boqian Jiang
Dec 30, 2015 rated it did not like it
Well, some useful thought in the book but not very well explained. Most part of the book is repetitive. Not recommend.
Neerav Berry
Jan 08, 2017 rated it really liked it
Shelves: finance
Bit text book like, but great insights and recommendations on how to deal with the problems created by excessive debt.
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“If all markets could be made perfect, and all human beings made rational, then more financial contracts, more trading, more liquidity, and more price discovery would indeed bring us closer to an efficient competitive equilibrium in which all resources would be allocated as efficiently as possible. But in the real world of inherently imperfect markets, imperfect information, and of human beings part rational and part not, market completion and increased liquidity can have negative effects.” 2 likes
“It is therefore possible, though by no means certain, that we face not merely a severe debt overhang problem produced by excessive credit growth but also an underlying structural deficiency of nominal demand. If” 1 likes
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