Yellen stated in a speech that “the U.S. banking system remains sound.”
Treasury Secretary Janet Yellen stated Tuesday that “the situation is stabilizing and the U.S. banking system remains sound,” after regional bank disasters have shaken the U.S. banking gadget.
“The Fed’s facility and discount window lending are working as intended to provide liquidity to the banking system,” she stated all through a speech at a gathering of the American Bankers Association in Washington. “Aggregate deposit outflows from regional banks have stabilized.”
She stated the federal government’s intervention within the disasters of Silicon Valley Bank and Signature Bank have been “necessary” — and stated “similar actions could be warranted” to offer protection to smaller banks.
Treasury Secretary Janet Yellen takes questions at the Biden management’s plans, following the cave in of 3 U.S. lenders, on Capitol Hill in Washington, March 16, 2023.
Mary F. Calvert/Reuters
“The steps we took were not focused on aiding specific banks or classes of banks,” she stated. “Our intervention was necessary to protect the broader U.S. banking system, and similar actions could be warranted if smaller institutions suffered deposit runs that pose the risk of contagion.”
She argued that the life of smaller banks used to be important.
“Large banks play an important role in our economy, but so do small- and mid-sized banks,” she stated. “These banks are heavily engaged in traditional banking services that provide vital credit and financial support to families and small businesses. They also increase competition in the banking sector, and often have specialized knowledge and expertise in the communities they invest in.
“Large banks play an important role in our economic system, however so does small and mid-sized banks,” she said. “These banks are closely engaged in conventional banking services and products that offer important credit and fiscal give a boost to to households and small companies. They additionally build up festival within the banking sector and continuously have specialised wisdom and experience within the communities they put money into. Indeed, many of those banks have performed an important role in supporting our financial restoration within the depths of the pandemic.”
“The Treasury is dedicated to making sure the continuing well being and competitiveness of our colourful neighborhood and regional banking establishment,” she stated.
ABC News’ William Kim contributed to this document.
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