Mohamed A. El-Erian
Mohamed A. El-Erian

@elerianm

2 تغريدة 1 قراءة Mar 16, 2023
This is the typical regulatory response to a financial accident that surprised the Federal Reserve.
It is warranted if last week’s bank failures were due to a broad structural weakness rather than (i) bank-specific issues and (ii) lapses in Fed supervision and analysis.
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Also, it would not be costless to the #economy if it tightens lending and increases the cost of financial intermediation.
It could also fuel the gradual hallowing out of the belly of the banking system’s (size) distribution
#economy #banks #svb #fed #federalreserve #markets @wsj

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