- Former Treasury Secretary Lawrence Summers said the meltdown of SVB Financial Group shouldn't pose a risk to the financial system as long as depositors are made whole.
- SVB's stock was decimated after the California bank holding company moved to bolster its capital position after a significant loss on its investment portfolio.
- The Federal Reserve's steep interest-rate hikes over the past year have forced banks to pay out more to depositors while they are receiving lower rates on some of their longer-dated assets.
- There may be a need for some consolidation in the banking sector as a result of the latest developments.
- Senate Banking Committee Chair Sherrod Brown called for 'ensuring that bank mergers, if approved, serve American families, small businesses, and communities – not Wall Street and big corporations.
Summers Sees No Systemic Risk From SVB If Depositors Protected
Former Treasury Secretary Lawrence Summers said the meltdown of SVB Financial Group shouldn’t pose a risk to the financial system as long as depositors are made whole.
Chris Anstey
