Yellen Defends Special Rules and Strong Capital for Banks

U.S. Treasury Secretary Janet Yellen emphasized the importance of tailored banking regulations for specific activities of financial institutions, stating that they aim to reduce unnecessary compliance burdens. Speaking at the American Bankers Association annual meeting in New York on Tuesday, Yellen expressed her inclination to maintain strong capital requirements.

Yellen highlighted the benefits of robust capital regulations established particularly after the 2007-2009 financial crisis, praising their role in bolstering the resilience of the U.S. economy during the COVID-19 pandemic. She underscored the critical role of a well-capitalized banking system in ensuring economic health and resilience.

"Recognizing how important it is to have a healthy banking system to support a healthy economy, my inclination is certainly to ensure that we have a strong capital and liquidity position to support the economy with a safe and sound banking system," Yellen said.

The Treasury Secretary's remarks respond to concerns about the complexity of regulatory demands from various institutions. Yellen's stance suggests a balance between alleviating the regulatory burden on banks while not compromising the protective measures provided by strong capital requirements.