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Summers Sees Heightened Risk of Market Breakdowns, Lauds BOE

  • Former Treasury chief says BOE hasn’t resolved UK policy issue
  • Summers sees risks in rapid rise in US interest rates
Bloomberg business news
WATCH: Former US Treasury Secretary Lawrence Summers says the Bank of England’s plan to buy long-dated notes is the “right thing to do.”Source: Bloomberg

Former Treasury Secretary Lawrence Summers said that heightened volatility has raised the danger of “breakdowns” in market functioning -- although that’s not yet been seen beyond the UK, and the priority for global monetary policymakers remains containing inflation.

“I certainly wouldn’t be surprised if we see other financial-stability issues arise that demand responses” from policymakers, Summers said in an interview on Bloomberg Television Wednesday. “The gilt market was not working and functioning properly,” which was why the Bank of England has intervened, he said. “Other markets right now are functioning.”