NEW HAVEN, Conn., April 3 (Reuters) – U.S. Treasury Secretary Janet Yellen on Monday mentioned deposit outflows from small and medium-sized banks have been diminishing, however she was watching the scenario carefully and was “not keen to permit contagious runs to develop” within the U.S. banking system.
Yellen advised reporters after an occasion at Yale College that confidence within the banking system was strengthened by actions taken by the Treasury, Federal Reserve and Federal Deposit Insurance coverage Corp after the failures of Silicon Valley Financial institution and Signature Financial institution.
“My learn is that outflows from smaller and medium-sized banks are diminishing, and issues are stabilizing, however it’s a scenario we’re watching very carefully,” Yellen mentioned.
Requested whether or not the Monetary Stability Oversight Council, the multi-regulator physique charged with curbing systemic dangers, had spent an excessive amount of time on assessing dangers of local weather change and missed issues that led to the failures of Silicon Valley and Signature, Yellen disagreed, saying the physique research all potential monetary dangers.
“We have centered on a variety of points together with monetary, dangers and haven’t put all of our concentrate on local weather dangers,” she mentioned, including that the physique had additionally recognized rate of interest mismatches as a possible danger.
“I do not assume there is a basic downside with the banking system,” she added.
Reporting by David Lawder; Enhancing by Mark Porter and Sonali Paul
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