Lord Turner’s iron law of banking

Author: Danielle Myles | Published: 15 Nov 2013
  • Adair Turner, the former chairman of the UK Financial Services Authority, has said that every 15 years, one of the world’s banking system extends excessive credit to the real-estate sector;
  • Dubbed the iron law of banking, he said banks’ bias towards real-estate lending needs to be addressed through regulation;
  • He suggested the Financial Policy Committee, of which he was a member, could have been more direct in telling the market the dilemma regarding prudential regulation and economic growth.

Every 15 years, one of the world’s banking system extends excessive credit to the real-estate sector creating threats to the overall economy.

It...