Lawrence Summers Quotes

The problem with the focus on speculators, as was demonstrated during the financial crisis, is that it tends to divert attention from the real villains. During the financial crisis, the villains were the actions of the banks, not the speculators betting on bank share prices.

I don't think anybody's too big to fail. I think the - I think if what you've got is sort of a large number of institutions who are going to fail, then that ends up affecting the system.

The market, as we're all painfully aware in the aftermath of the banking crisis, can be an idiot. It has no perception of right or wrong, or even sensible or insane. It sees profit.

The assumption that Washington could and would resolve Lehman Brothers without a bankruptcy, as it had Bear Stearns, was the single biggest mistake in the series of mistakes in 2007 and 2008 that led to the financial panic and the ensuing epidemic of job losses.

Bulls don't read. Bears read financial history. As markets fall to bits, the bears dust off the Dutch tulip mania of 1637, the Banque Royale of 1719-20, the railway speculation of the 1840s, the great crash of 1929.

These heroes of finance are like beads on a string; when one slips off, all the rest follow.

I put forward a pretty general theory that financial markets are intrinsically unstable. That we really have a false picture when we think about markets tending towards equilibrium.

The reality is that financial markets are self-destabilizing; occasionally they tend toward disequilibrium, not equilibrium.

What we know about the global financial crisis is that we don't know very much.

Had this attack been allowed to run its course, hundreds of billions in long term debt and equity capital that underpinned the Wall Street based speculation machines would have been wiped out, including large amounts of stock owned by executives and insiders. Such a result would have been truly constructive from a societal vantage point. It would have implanted an abiding 1930s style general lesson about the deadly dangers of leveraged speculation.

Unregulated derivatives like credit default swaps threaten our regulated markets, or indeed our economy without any Federal agency knowing about it.

Some things never change - there will be another crisis, and its impact will be felt by the financial markets.

The financial crisis revealed important weaknesses in many areas of our financial system.

In the 1987 stock market crash, according to the conclusions of the official Brady report, colossal sales of stock index futures by so-called portfolio insurers - whose investment strategies depended entirely on these derivatives - greatly exacerbated the 500-point market decline.

Financial markets need to become less, not more, efficient.

As I write in 2012 we certainly do not believe that it is over yet, and the worst may be yet to come. Efforts by governments to solve the underlying problems responsible for the crisis have still not gotten very far, and the 'stress tests' that governments have used to encourage optimism about our financial institutions were of questionable thoroughness.

In truth, in the fairy-tale version of bailing out Lehman, the next domino, A.I.G., would have fallen even harder. If the politics of bailing out Lehman were bad, the politics of bailing out A.I.G. would have been worse. And the systemic risk that a failure of A.I.G. posed was orders of magnitude greater than Lehman's collapse.

We live in an age of great jitteriness in the financial markets. And there's no doubt at all, I think, that the volume of computer-traded stocks has helped contribute to that.

We've suffered a 'Ponzification' of the economy in recent years, as bubbles have built up and then burst, and each time we act as though it's the first time.

Many of us like to think of financial economics as a science, but complex events like the financial crisis suggest that this conceit may be more wishful thinking than reality.

We judged that a sudden, disorderly failure of Bear would have brought with it unpredictable but severe consequences for the functioning of the broader financial system and the broader economy, with lower equity prices, further downward pressure on home values, and less access to credit for companies and households.

The 2008 financial crisis is usually attributed to vampire squid greed. There was certainly a lot of that. But it was also just as likely to have been caused by the chaos of process created by those big, sexy bank mergers when, in the name of 'economies of scale,' critical members of the trust and responsibility chain were cavalierly eliminated.

Cause and effect, the riddle of all history, is a particular devil in financial history; and never more so than today, where entire classes of security are collapsing not on public exchanges and stock-tickers but because there are no markets to establish prices this side of nothing.

Given the extent of the exposures of major banks around the world to A.I.G., and in light of the extreme fragility of the system, there was a significant risk that A.I.G.'s failure could have sparked a global banking panic.

An unregulated derivatives market essentially gives Wall Street a way to place hidden taxes on everything in the world.