A Greek departure from the eurozone will have major repercussions for the dollar, and US officials are doing little to shield Americans from the potential damage, economists says.
Simon Johnson is a professor at the Massachusetts Institute of Technology’s Sloan School of Management. He tells host Marco Werman that US policymakers and bankers must move quickly to protect American investors from the impact of a possible Greek default.
“The extent of official negligence on this issue cannot be overstated,” Simon tells host Marco Werman. “Unfortunately policymakers in the White House, on Capitol Hill — and I would emphasize particularly the New York Federal Reserve Bank — have buried their heads in the sand. They do not even want to talk about these issues seriously.”
Simon says big US banks must build up their equity, and “firewall off” as much of the US financial system as possible. He says banks should implement an emergency suspension of dividends, and use the savings to increase their capital.
The World is an independent newsroom. We’re not funded by billionaires; instead, we rely on readers and listeners like you. As a listener, you’re a crucial part of our team and our global community. Your support is vital to running our nonprofit newsroom, and we can’t do this work without you. Will you support The World with a gift today? Donations made between now and Dec. 31 will be matched 1:1. Thanks for investing in our work!