Jul 23, 2010

Larry Summers on FinReg not being a cause for uncertainty in the markets

If you're worried about uncertainty, the people who decided to make 10s, if not hundreds of billions of dollars of subprime loans, and they're saying the uncertainty is about what the government is going to do? People have off-balance sheet SIVs where they can't even calculate what the total extent of their liabilities are, their uncertainty wasn't caused by the government. Their uncertainty was protected by what the government did, by the fact that those institutions were facing, in many cases, catastrophe.

And the government, NOT to help them, but to protect the system, did what was necessary to take what was a tale, of literally a depression, out of the market. That's the important thing that's happened about uncertainty.

~ Larry Summers, director, National Economic Council, CNBC's Closing Bell, July 21st, 2010

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