Larry Summers says the Fed has inflation on the ropes, calls out crypto frauds, and bemoans the debt-ceiling fiasco. Here are the ex-Treasury chief's 12 best quotes from a new interview.

• The Fed may only have to hike interest rates once more to beat inflation, Larry Summers says.
• The former Treasury secretary calls out crypto frauds and pushes for stronger banking regulation.
• He compares Republicans' debt-ceiling antics to taking hostages or kidnapping and demanding ransom.

The Federal Reserve might only need to hike interest rates once more to conquer inflation, but there's still a risk of "stagflation" or a painful combination of soaring prices and stagnant economic growth, Larry Summers has warned.

The veteran economist and former Treasury secretary called for an overhaul of financial regulation, given the sudden collapse of Silicon Valley Bank and Signature Bank in March, and early signs of a credit crunch.

He also flagged pervasive fraud in the cryptocurrency industry, and compared Republicans' resistance to lifting the debt ceiling to hostage-taking and kidnapping.

Summers, who sees a 70% chance of a US recession within the next 12 months, made the comments during a recent episode of the "On with Kara Swisher" podcast.

Here are Summers' 12 best quotes, lightly edited for length and clarity:

The Fed and interest rates:

1. "I certainly think we are a large part of the way through the necessary tightening. If there were not a credit crunch and a banking set of issues, I would feel that the Fed needed to engage in three more tightenings, perhaps a little more than that. Given that we have this credit crunch coming from the banking side that's doing some of the work of interest-rate increases, it's possible that we'll have had enough after May."

2. "In an old hotel, there's a lag between the time you turn the faucet in the shower and the time the temperature of the water changes, and it's very hard to avoid scalding yourself or freezing yourself as you adjust. I think the Fed's challenge is a little bit like that."

Inflation and recession

3. "It would be a terrible mistake to be so squeamish about the possibility of recession that we allowed a high rate of inflation to become built into expectations. It's like what happens when you ignore any illness. The treatment that's necessary when you've put it off much too long tends to be much more painful, difficult, and with lower prospects of success."

4. "Given where inflation is right now and given the downward pressures on the economy, I certainly think stagflation is a meaningful risk, and it's probably a risk that's underpriced in the markets."

5. "There's an old political observation: 100% of the people pay rising prices, and only 6% of the people are unemployed. And so inflation is particularly salient. I think there's some logic to that."

Banking regulation

6. "The right time to fix the roof is when the sun is shining, not when it's raining. The right time to debate the structure of the fire department is not during the fire but is after the fire has been put out."

7. "I think the philosophy we need is one of not trying to make everybody smart, but instead trying to make the system safe for when people are stupid."

8. "If you look at auto accidents in our country, when we moved to seatbelts, guardrails, safer windshields and the like, that's when we started to make real progress. Some similar idea needs to apply with respect to financial regulation."

Cryptocurrencies and fraud

9. "If you look at almost anything in its early stage, whether it's the automobile industry, whether it's the application of electricity, whether it's the internet, there are a lot of drifters and grifters who are in it. And that's certainly true of crypto."

10. "I would be quite surprised if there wasn't some residue from all of this innovation that proved to be quite important. And I would be even more surprised if there wasn't a very large amount of shaking out."

The debt ceiling:

11. "My kids sometimes spend more money than I wish they did, and we discuss whether they're going to pay or whether I'm going to pay, but we don't discuss whether the family should default to the Visa organization. That's how I feel here. I don't think the idea of defaulting on the debt associated with spending we've already done should be on the table."

12. "Taking hostages and kidnapping people and demanding ransom in the form of change is the wrong thing to do, even if what you want from your hostage taking has some reason and logic in it."