Yellen, caught between financial markets and U.S. Congress, pleases neither

Treasury Secretary Janet Yellen will sit for her third congressional hearing in a week on Thursday, where, once again, she’s likely to be pressed on whether the U.S. government will guarantee all of the country’s $19.2 trillion in bank deposits.

Bankers have argued that a universal guarantee is needed to keep deposits from fleeing for perceived safety to large banks that are viewed as “too big to fail” until the current banking crisis eases. Without authorization from Congress, much of what Yellen can do to calm markets and safeguard deposits mimics the contours of the actions on SVB and Signature Bank - case-by-case assessments of whether a bank failure would cause spillovers.

Yellen said she was not considering such a move and was reviewing banking risks on a case-by-case basis, adding: “I have not considered or discussed anything having to do with blanket insurance or guarantees of deposits.” But those market demands fail to take into account the political reality that the Biden administration faces, regulatory experts say.

Finance Finance Latest News, Finance Finance Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

First Republic shares drop 11 per cent as Yellen says Treasury won’t insure all depositsFirst Republic’s shares have lost much of their value since the banking crisis started in the U.S. on March 8
Source: globeandmail - 🏆 5. / 92 Read more »

U.S. banking system stabilizing, situation ‘very different’ from 2008 crisis: Yellen - National | Globalnews.caIn a speech aimed at calming nerves rattled by two prominent bank failures this month, Janet Yellen said that the U.S. banking system was stabilizing. Yup It’s worse..
Source: GlobalNational - 🏆 81. / 51 Read more »

CBDC adoption could destabilize banks: U.S. Treasury studyA U.S. Treasury study claims that fully integrating CBDCs into the economy would destabilize banks. A recent White House report criticized stablecoins, claiming that they are too vulnerable to run risks to fulfil their role as a “fast payment” instrument. A study released by the Office of Financial Research (OFR) on 22 March claimed that […]
Source: CryptoAmb - 🏆 22. / 68 Read more »