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Summers Sees No Systemic Risk From SVB If Depositors Protected

  • Former Treasury chief sees ‘element of overreaction’ in stocks
  • Summers says ‘going to be issues’ for regulators to look at

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.

“What is absolutely imperative is that, however this gets resolved, depositors be paid back, and paid back in full,” Summers said on Bloomberg Television’s “Wall Street Week” with David Westin. And as long as that’s the case, while there will be risks to banks’ asset values, “I don’t see — if this is handled reasonably, and I have every reason to think that it will be — that this will be a source of systemic risk,” he said.