Trustee Douglas Peterson '80 P'14 P'15 on the $500 billion infrastructure gap


Douglas Peterson Douglas Peterson

President and Chief Executive Officer of McGraw Hill Financial, and former President of Standard & Poor’s Rating Services, is no stranger to making the news. Recent months have been particularly busy, with Peterson asked to speak numerous times about the $500 billion infrastructure hole that’s estimated by Standard & Poor’s Rating Services. This is the annual gap expected for the next 15 years between investment needs and available public funds.

The gap, he says, is a result of governments “funding less and less of their infrastructure.” Banks make up about $300 billion of the gap, but have capital constraints and regulations “and they’ve been very flat for many years now,” Peterson told a CNN interviewer.

So how is the remaining $200 billion gap to be funded? Peterson says it will come down to institutional investors: insurance companies, pension funds, sovereign wealth funds, and others.

Peterson explained why infrastructure matters: “Infrastructure is one of the most important drivers of jobs and of growth. It’s also something we leave behind for new generations to benefit from. That infrastructure is related to their well being, and to the continuing cycle of jobs and growth,” he said.