United Press International

LONDON, Aug. 27 (UPI) — Former U.S. Treasury Secretary Lawrence Summers warns the United States may be heading into recession, a British newspaper reported.

Summers issued his warning as the financial markets prepared to begin a new week — following two weeks of volatility sparked largely by what analysts have variously characterized as a credit freeze or a liquidity freeze. The U.S. stock market had stabilized somewhat by the end of trading last week.

“It would be far too premature to judge this crisis over,” said Summers. “I would say the risks of recession are now greater than they’ve been any time since the period in the aftermath of (Sept. 11, 2001).”

Summers- comment came as Germany’s state bank SachsenLB — which The (London) Telegraph called the biggest victim to date of the sub-prime mortgage debacle — was sold after reportedly accumulating $80 billion in risky assets through a series of Irish funds that the newspaper said had been kept off the balance sheet.