ISTANBUL
The head of the US Treasury said Thursday banking regulations need to be re-examined amid recent failures in the system.
“Regulatory requirements have been loosened in recent years,” Treasury Secretary Janet Yellen said at the National Association for Business Economics (NABE) 39th Annual Economic Policy Conference held in Washington, D.C.
“Still, any time a bank fails, it is cause for serious concern … I believe it is appropriate to assess the impact of these deregulatory decisions and take any necessary actions in response,” she said in her remarks released by the Treasury Department.
Yellen’s comments came after the collapse of Silicon Valley Bank and Signature Bank, in addition to financial difficulties surrounding Silvergate Bank and First Republic Bank.
The Treasury’s chief last week told Senate and House committees that failure of small banks can trigger demise of others, and added her agency is prepared to take additional actions amid the banking crisis.
“It’s also important that we reexamine whether our current supervisory and regulatory regimes are adequate for the risks that banks face today,” she said in her remarks at NABE — an international association of applied economists.
“Regulation imposes costs on firms, just like fire codes do for property owners. But the costs of proper regulation pale in comparison to the tragic costs of financial crises,” she added.
