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Former Lehman Restructuring Head Calls Janet Yellen 'Superwoman Of The Moment'

Mark J. Shapiro, the head of restructuring at Lehman Brothers when it collapsed in 2008 and currently the executive committee member at Shearman & Sterling, reportedly said that the difference between the global financial crisis and the present situation is the fact that the government acted early.

“The most important thing that the government did was to do something early, which they did not do in the Lehman crisis. If you circle all the way back to 2008, Lehman was actually a much slower-moving disaster. Over the course of that summer, we watched Lehman’s stock price go down, we watched Lehman have to raise capital to try to deal with its liquidity problems. So, it was a very slow-moving train that ultimately culminated in the bankruptcy in September of 2008,” Shapiro said in an interview with Bloomberg TV.

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Superwoman’ Yellen: The insolvency specialist also praised Treasury Secretary Janet Yellen and lauded her quick response to the crisis that unfolded last week.

“This happened within a few days. I think I will call Janet Yellen the Superwoman of the moment because she decided, obviously with others in the government, that it makes sense to step up to the play quickly and try to stem what looked like what could be a run on many banks, not just two,” Shapiro said.

A joint statement by the Treasury, the Fed and the FDIC indicated that Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank SIVB in a manner that fully protects all depositors.

“Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer,” it had said.

Shapiro further highlighted the fact that not only was the FDIC backing the banks but support also came in from the government that proved helpful.

“One of the interesting things that is happening right now is that they came out with the statement yesterday where they said that not only was the FDIC backing the banks, but the full faith and credit of the United States government was backing the banks. What that means is that this is like owning deposits or having deposits in either of the two banks that were taken under receivership. You couldn’t have a safer instrument than any other bank in the country,” Shapiro noted.

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