Janet Yellen says US banking system ‘remains healthy’ despite bank failures

Treasury Secretary Janet Yellen will tell a Senate committee that the US banking system “remains healthy” and will defend the Biden administration’s move to bail out savers at two failing banks and avert a broader financial contagion, according to prepared testimony ahead of Thursday’s hearing.

Yellen Lawmakers on the Senate Finance Committee are expected to be questioned over aggressive intervention by U.S. regulators and officials on Sunday to guarantee all deposits in Bank of Silicon Valley and Signature Bank, two failed regional banks, and created a new Federal Reserve structure to provide liquidity to other banks.

“I can assure committee members that our banking system remains healthy and that Americans can rest assured that their deposits will be there when they need them,” Yellen said at the hearing, which begins at 10:00 am ET. . “This week’s actions demonstrate our strong commitment to keeping savers’ savings safe.”

Although the US government’s actions stabilized the markets earlier in the week, investors were again spooked by turmoil on the stock exchange on Wednesday. Credit Suissea Swiss bank that Yellen might have to turn to.

Most Democratic lawmakers have praised President Joe Biden’s administration for actions to protect the banking system and blamed Donald Trump’s financial deregulation for paving the way for the crisis.

But some Republicans say US officials and regulators mismanaged the financial system by keeping borrowing costs too low for too long during the coronavirus pandemic. inflation and forcing the Fed to raise interest rates so quickly that it hurts some banks.

While some see Biden’s move as appropriate, others have criticized it as yet another dangerous bailout. But Yellen will defend the administration’s actions, as well as those of the Fed and Federal Deposit Insurance Corporation, according to her prepared remarks.

“The government has taken strong and decisive action to build public confidence in our banking system,” she says. “On Monday morning, customers were able to access all the money in their deposit accounts so they could do payroll and pay bills.”