Part of the DNA of the Milken Institute is a belief in the power of capital markets to solve urgent social and economic problems. But in the wake of the 2007-08 financial meltdown, voices have been raised around the world asserting that capital markets are rigged and serve the interests of only a few.

Robert Shiller, recently awarded the Nobel Prize for economics, made a different argument in his 2012 book, Finance and the Good Society (excerpted in the Review's Second Quarter 2012 issue). "Finance should not be viewed as inherently or exclusively elitist, or as an engine of economic injustice," he wrote. "Finance, despite its flaws and excesses, is a force that potentially can help us create a better, more prosperous and more equitable society. In fact, finance has been central to the rise of prosperous markets economies in the modern age – indeed, this rise would be unimaginable without it."

We couldn't agree more – and by no coincidence, an important focus of the Institute's work is exploring ideas and advancing solutions to widen access to capital. That focus can be glimpsed in the range of the Institute's activities, in our convening as well as our research. In the past decade and a half, we've published blueprints for mainstreaming minority businesses by financing "domestic emerging markets," compiled best practices for providing women access to credit and organized Financial Innovation Labs™ on a host of capital access issues. Here are a few examples of our recent work:

• Through our Access to Global Capital initiative, we are working closely with leading multinationals and foreign governments committed to implementing best practices in governance and regulation in order to open up markets and enhance access to global capital.
• Our DC-based Center for Financial Markets is facilitating discussion with international organizations and aid agencies on deepening capital markets in developing economies, with a special focus on integrating the markets in East Africa.
• Last October, the Institute's white paper, Where Banks Are Few, Payday Lenders Thrive [see excerpt on page 48], highlighted the abuses of an industry that charges borrowers up to 460 percent interest for payday advances, and provided recommendations for policy makers and mainstream financial institutions to ensure that this market is served at more affordable rates.

In the last half decade, financial markets have recovered dramatically, yet concerns about equity and access remain. In the coming years, one task for policymakers and financial market leaders is to help establish finance as Shiller's force for a better, more prosperous and more equitable society. The Milken Institute will remain an active, engaged participant in that effort.

Michael Klowden

CEO and President

Michael Klowden, CEO and President