There's more economic pain coming as the SVB fallout is likely not contained, Mohamed El-Erian says
There's more economic pain coming because the fallout from the Silicon Valley Bank collapse is likely not contained, according to top economist Mohamed El-Erian.on Tuesday, El-Erian said that while policymakers limited contagion in the financial system with most deposits still in the US banking system, that doesn't account for the effect on the economy as banks getting influxes of deposits have different lending profiles.
"This economic contagion, which will play out over time, threatens to increase the challenges facing an economy that is dealing with inflation, a mishandled interest-rate hiking cycle, declines in personal savings, bouts of financial instability and a slowing global economy," El-Erian warned. Other market commentators have also warned of more economic pain, as the outflow of deposits in recent weeks will make banks less willing to lend, leading to
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