Mark J Shapiroat the head of the reorganization Lehman Brothers when it collapsed in 2008 and is currently a member of the executive committee Shearman & SterlingReportedly said that the difference between the global financial crisis and the current situation is The fact is that the government acted quickly.
“The most important thing the government did was act quickly, which they didn’t do in the Lehman crisis. If you circle back to 2008, Lehman was a really slow-moving disaster. During that summer, we Saw the stock price of Lehman going down, we saw that Lehman had to raise capital to deal with its liquidity problems. So, it was a very slow train which eventually ended in bankruptcy in September of 2008. , “said Shapiro in a Interview With Bloomberg TV.
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,Superwoman’ Yellen: Insolvency expert also praised Treasury Secretary Janet Yellen and commended his prompt response to the crisis that emerged last week.
“It happened within a few days. I guess I would call Janet Yellen the superwoman of the moment because she decided, obviously along with others in the government, it made sense to quickly escalate the drama and Try to stop what you see.” Could run on multiple banks, not just two, Shapiro said.
A joint statement by the Treasury, the Fed and the FDIC indicated that Yellen had approved actions that would enable the FDIC to meet its resolution. Silicon Valley Bank SIVB In a way that fully protects all depositors.
“Depositors will have access to all their money from Monday, March 13. There is no loss associated with the resolution of Silicon Valley Bank will be borne by the taxpayer,” it had said.
Shapiro highlighted the fact that not only was the FDIC supporting the banks, but there was also support from the government that proved helpful.
“One of the interesting things that’s happening right now is they came out with the statement yesterday where they said that not only FDIC were supporting the banks, but the full faith and credit of the United States government was supporting the banks. This means that it is like holding a deposit or holding a deposit in either of the two banks taken under receivership. “You can’t have a safer instrument than any other bank in the country,” Shapiro said.