Former Treasury Secretary Larry Summers joins a panel on CNN Primetime to weigh in on the banking system following the collapse of Silicon Valley Bank, as well as the impact of rising interest rates on bank stability.
Hear what former treasury secretary says about bank failure
“what comes around is all around”
What woke around broke around.
As a former CEO of an Australian credit union, this guy is on the money. Unfortunately we didn’t hear about causes of the current problems:
1. Poor management of liquidity and interest rate risk at SVB
2. Weaken regulations under Trump
3. Poor oversight from the regulator
4. Poor oversight from SVB’s Board
@Thorax999Good to see another Aussie following all this. That said, I’m not sure what period you are referring to or how having a delegated lending authority gives you insight into dealing with APRAH, and managing interest rate and liquidity risk.
As you know, the number of banks and credit unions has reduced substantially in Australia. Some of these would have been because they realised members (in the case of credit unions) would benefit more from a merger, whilst others would have been tapped on the shoulder. Those who got the tap on the shoulder were typically under closer scrutiny by APRAH with formal 6 month reviews if my recollection serves me correctly.
Reading today that SVB didn’t haven’t a Chief Risk Officer for last 8 months is just mind blowing to me.
@An Acc Boards by the way shouldn’t be focused on politics, campaigns, etc. they will be aware of it, but that’s operations and management’s responsibility.
@Andrew Mason I think you mean APRA mate and managing a book is not a CEO’s job because I have managed a book for a mortgage manager and a segmented book for a bank and i have never been a CEO. Also you are right there is less banks like that around now and why? Because interest rates went up LOL my original point and that is because they become less competitive as they could only operate competitively when the cost of funds was low. But yer no risk officer is a good way to go down the path of ‘but we didn’t know we where in trouble’ lol
A very wise man. Thank you.
No,he really isn’t
Finally someone knows that inflation is the priority. Safe money is a fire starter if it’s worthless. Up rates 25
Except inflation has multiple causes.
@steven henry When there’s more money than supply is a big one. Like during the pandemic.
@Sadie Jones I would say that a couple of bills including the infrastructure bill, helped cause high interest rates.
Blimey!!! Apparently living in California isn’t a wonderful life anymore!!! Cheers
Yep. This whole Silicon Valley Tech era appears to be a bit like The California Gold Rush (1848–1855). When that was over, it left a lot of down and out people and many fled to other states.
Geez! When bumbling Biden said ” We are going to have a long dark winter!”! I didn’t think it was going to be his whole presidency!!
Wow another great non-political informative piece of broadcasting; I’m impressed! Bravo; well done!!👍
Summers is notoriously apolitical and objective in his economic analysis. Both the left and the right hate him for that.
The rich people will always tell you “do not worry, just relax” while they take every precaution imaginable. Your money is safe as long as you don’t go to the bank and ask for it lol.
Looks like it….
Everyone is saying that this will be really bad….
But this Guy is saying, this is still okay….
Maybe this is the reason why He is now an ex Treasury Secretary…..😂🤣😹🤭😁
The rich people that had their money in the Asheville bank, or some of our most progressive companies. The people running this bank were idiots. I believe there was a report within the last couple of days from the Internet, work on the incompetence of the management of this particular bank that failed. None of the individuals had very much banking experience.
Strangers leaving comments always tell you to panic or peddle their thoughts when they have no experience in government or economics.
You’re just repeating the words of someone else with no knowledge of what goes on.
@T. R. Campbell , 👈 example of my point.
@JAMES C you are making a lot of assumptions. I happen to be a successful commodities trader for over twenty years, so I know a thing or two about the economy. There is nothing new under the sun, buddy. Seen this kind of thing before. If there were any reason to panic, none of these people would tell you that. Trust me on that.
The impact of high interest rates on bank stability? It’s very simple: an interest rate is essentially the price of money, and when money is more expensive people demand less of it. As banks are in the business of money, high inflation/high interest rates =not good.
Populist tropes about ‘woke investments’ and ‘deregulation’ are also predictable, but miss the point.
Does this mean the 740 billion dollar inflation reduction act is failing at reducing inflation?
@Scotty Anderson Almost certainly yes. Inflation has to do with the supply of money vs. the supply of goods, and is controlled primarily by monetary policy. Unfortunately the president’s chief economic advisor is a neo-Keynesian who thinks that it’s possible to manage inflation via fiscal policies. Most mainstream economists will tell you he’s wrong.
KARMA DUE TO FAILURE 😂😂😂😂😂
A riveting interview, I should have just watched Netflix lol
I blame the FEDs for this, because in the end they benefit by either buying off the failed banks cheaper or something. The fed can print credit as long as someone will borrow it into existence, but they cannot print product (or production).
Every day we have a new problem. It’s the new normal. At first we thought it was a crisis, now we know it’s a new normal and we have to adapt. this year will be a year of severe economic pain all over the nation.. what steps can we take to generate more income during quantitative adjustment?I can’t afford my hard-earned $180,000 savings to turn to dust
Having an investment advisor is the best way to go. Based on a direct encounter with a CFP named Corinne Cecilia Heaney, I can say with certainty that their skills are excellent. She helped raise over $580,000 in 18 months from an initially stagnant portfolio of $150,000
please how can i find the lady you mentioned’?
Corinne really seem to know her stuff. I found her website, read through her resume, educational background, qualifications and it was really impressive. She is a fiduciary who will act in my best interest. So, I booked a session with her
Yep
This egg better tell the truth we all know what happened
There is NO bank that should be too large
When they say, “don’t panic,” you better pay attention.
Most everyone back in the -90’s regarded me an imbecile arguing stock used to be a help raise capital to family businesses, argue all of it turned in to a money shoveling fortune game. Me still not owning any stock, looking from the outside in – you guys.. the anxiety, the arfiticial
interest rate rises have lead to my savings actually making me some money that I can spend instead of half a percent measly little growth
But the type of inflation we are seeing is not solved with just one size fits all rate increases imo. It’s solved with practical supply solutions imo given by supply chain experts, logistics experts, goods and services experts.
When he said “tighten credit” why did I interpret that to mean “If you’re poor or middle class, brace yourself! You will suffer the most because of the irresponsibility of the rich and powerful.” Seems like we have seen this film before. . . ?
Congress failed us again. The GOP bill would had failed but 16 Democratic senators and 36 Democratic representatives joined Republicans to pass the Economic Growth, Regulatory Relief and Consumer Protection Act, generally referred to as S2155.
Just one of them could have stopped this.