Treasury Secretary Yellen says bank rules need to be ‘reexamined’ following bank failures

U.S. Treasury Secretary Janet Yellen faced questions on Capitol Hill Thursday for the first time since last week’s collapse of Silicon Valley Bank and New York Signature Bank.

Yellen testified before the Senate Finance Committee to discuss President Biden’s budget proposal, but part of the discussion was focused on the state of the U.S. banking system.

“I can reassure the members of the committee that our banking system is sound, and that Americans can feel confident that their deposits will be there when they need them,” said Yellen.

Yellen reinforced President Biden’s message from earlier this week when he said taxpayers would not be covering the cost of the bank failures.

“Importantly, no taxpayer money is being used or put at risk,” said Yellen.

Yellen’s testimony comes after President Biden called on Congress and bank regulators to strengthen existing regulations on Monday in response to the bank failures.

Democrats have blamed a 2018 rollback of bank regulations under the Trump administration.

“Do you agree with the president that we need to strengthen our banking rules?” asked Sen. Elizabeth Warren (D-MA).

“I think we certainly need to analyze carefully what happened that triggered these bank failures and reexamine our rules and supervision,” said Yellen.

Our Washington News Bureau has been talking to Republicans who say for now, making any legislative or regulatory change would be premature.

“Let’s get the facts first,” said Sen. Rick Scott (R-FL). “Let’s first find out what the problem is… Did somebody just not comply with existing law? Because if they don’t comply with existing law, how is it going to get better if we pass another law?”

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