El-Erian Says US Banks Need a ‘Circuit Breaker’ After Upheaval
- Says a pause by the Fed would be the wrong thing to do
- The tumult surrounding banks is a ‘multi month episode’
Mohamed Aly El-Erian
Photographer: Hollie Adams/BloombergThis article is for subscribers only.
Mohamed El-Erian says the latest upheaval surrounding First Republic Bank will make banks rethink their standards and prepare for tougher regulation.
“You have had an accident on the freeway and the immediate reaction is going to be to lower the speed limit,” El-Erian, chief economic adviser at Allianz SE and a Bloomberg Opinion columnist, said on Bloomberg Television Friday. “The expectation is you better tighten your lending standards both for your own reasons and because there is going to be more regulations coming your way.”