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The banking crisis, AI & Ukraine: Larry Summers weighs in
The recent spate of bank failures has caused significant turbulence in markets and left investors jittery across the globe, from Silicon Valley to Switzerland. But is this a sign of a systemic banking crisis or of a more fundamental flaw in capitalism? In an interview with Ian Bremmer on GZERO World, former US Treasury Secretary Larry Summers provides an in-depth analysis of the situation.
Summers is critical of the management of Silicon Valley Bank and the federal government's intervention, which failed to prevent the banking turmoil. He also expresses concerns about the real estate sector, particularly when it comes to office buildings, and corporate lending to mid-sized businesses.
The conversation also delves into the impact of artificial intelligence on the labor market, with Summers cautioning that AI will "bring about significant changes" that will “profoundly alter traditional hierarchies and ways of thinking,” which may threaten influential groups. It’s even probable, he tells Bremmer, that we’ll see “restrictionist and protectionist policies that limit our ability to benefit from these technologies or slow down [their development].”
Summers also proposes a contentious solution to rebuild Ukraine: seizing frozen Russian assets.
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Getty Images/Chip Somodevilla
Podcast: Larry Summers breaks down the banking crisis
Listen: On the GZERO World podcast, Ian Bremmer and former US Treasury Secretary Larry Summers discuss the recent bank failures that are disrupting global markets and worrying investors worldwide. They discuss whether the current situation constitutes a banking crisis and explore the role of inflation in contributing to the problems. As an inflation expert, Summers provides valuable insights and predictions on the duration of the financial turmoil.
Additionally, he warns of the significant changes that AI could bring to traditional hierarchies and proposes a controversial solution for rebuilding Ukraine: seizing frozen Russian assets.
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