US Fed chair defends post-crisis banking reforms
Federal Reserve Chair Janet Yellen has once again thrown her weight behind banking regulations that were put in place after the 2008 financial meltdown. Among them are many changes that the US president wants to scrap.
In her much-anticipated speech at the Jackson Hole, Wyoming, gathering of central bankers, US Fed Chair Janet Yellen on Friday insisted that stricter regulations in the banking sector were justified and far from being outdated.
She said the set of rules put in place after the 2008 financial crisis had helped to provide more stability and economic growth.
Her remarks came after efforts by US President Donald Trump to roll back legislation adopted to prevent another collapse in the global financial system.
Reading between the lines
Yellen noted that stress-testing had caused banks to increase their capital cushions in order to weather future shocks and had improved capital management.
"The steps to improve the capital positions of banks promptly and significantly following the crisis have resulted in a return of lending growth and profitability among US banks," the Fed chair emphasized.
She acknowledged, though, that lending might be less available to some borrowers with poorer credit histories.
Yellen offered only scant clues as to whether the Fed might raise interest rates again this year, something increasingly in doubt among analysts.
Yellen's term is due to expire in February, and Trump has said he may reappoint her. At the same time, he has floated the possibility of naming current economic adviser Gary Cohn to replace her as Fed chair.
hg/jd (AFP, Reuters)