Yellen: No Big Differences Between Her, Powell on Bank Rules
14 December 2017 - 9:38AM
Dow Jones News
By Ryan Tracy
WASHINGTON -- Federal Reserve Chairwoman Janet Yellen doesn't
expect the Fed will dramatically depart from its current course on
bank rules after she leaves early next year.
"All of my colleagues on the board have expressed a strong
commitment to keep in place the core reforms that have produced a
stronger financial system," Ms. Yellen said Wednesday in what was
likely her final press conference as head of the central bank. "I
have not seen anything emerge at this point that I would describe
as a significant difference."
Current Fed governor Jerome Powell is awaiting Senate
confirmation as the next Fed chief. Fed Vice Chair for Supervision
Randal Quarles, a Trump appointee, recently joined the Fed as the
point person on financial regulation.
Ms. Yellen sees "broad-based commitment" to those "core
reforms," such as stress testing and higher banks capital
requirements.
"I think all of us agree that it is appropriate to tailor
regulatory requirements" and the Fed could do better in alleviating
regulatory burden on community banks, she added.
Ms. Yellen also said the U.S. has made "substantial progress" on
making big banks' bailouts less likely in the future, but stopped
short of echoing Mr. Powell's recent statement that big U.S. banks
are no longer "too big to fail."
Ms. Yellen hedged her answer, pointing to progress made in
ensuring a huge bank could be unwound in an orderly way while
adding: "I think it is an ongoing process."
Asked about the rapid rise in the value of the digital currency
bitcoin, Ms. Yellen said it plays a very small role in the payment
system, "is not a stable store of value" and "is a highly
speculative asset."
She said the Fed doesn't have any role in regulating bitcoin,
other than assuring banks are appropriately managing "any
interactions they have with participants in that market and
appropriately monitoring
anti-money-laundering...responsibilities."
"I still see the financial stability risks from [bitcoin] as
limited," she said. "Risks threatening financial stability arise
when there is exposure to the banking system to fluctuating asset
valuations, and I really don't see any significant exposure of our
core financial institutions to threats from bitcoin."
"Undoubtedly there are individuals who could lose a lot of money
if bitcoin were to fall in price but I really don't see that as
creating a full-blown financial stability risk," Ms. Yellen
said.
Write to Ryan Tracy at ryan.tracy@wsj.com
(END) Dow Jones Newswires
December 13, 2017 17:23 ET (22:23 GMT)
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