Yellen Says Fed Should Make Sure Bank Rules Aren’t Too Burdensome
Federal Reserve Chairwoman Janet Yellen voiced support for making sure bank rules aren’t unduly burdensome, underscoring her potential flexibility on postcrisis financial regulation as President Donald Trump weighs whether to nominate her for a second term as central bank chief.
“The Fed has been working hard to ensure that its regulation and supervision of banks are tailored appropriately to the size, complexity and role different institutions play in the financial system,” she said Wednesday at a community banking conference here.
“For community banks, which by and large avoided the risky business practices that contributed to the financial crisis, we have been focused on making sure that much-needed improvements to regulation and supervision since the crisis are appropriate and not unduly burdensome,” she said.
Her comments largely echoed her previous remarks that the Fed is open to reducing some of the regulatory burden on banks, particularly smaller ones.
Ms. Yellen spoke as uncertainty swirls over who will run the world’s most powerful central bank after her current term as chairwoman expires in early February. She didn’t comment on her plans. Nor did she discuss the likely path of interest rates or the economic outlook.
Mr. Trump told The Wall Street Journal in July he was considering Ms. Yellen or his top economic adviser Gary Cohn for the top Fed job. The president also met with Fed governor Jerome Powell and separately with former Fed governor Kevin Warsh last week to discuss their possible nomination to run the central bank, according to administration officials. Other names said to be in contention for Fed chairman include Stanford University economist John Taylor and John Allison, the former BB&T Bank chief executive, according to people familiar with the process.
The Trump administration is spearheading an effort to roll back some of the financial regulation adopted after the financial crisis. Ms. Yellen has defended many of those measures, but her remarks Wednesday served as a reminder that she has expressed openness to adjusting some.
She called attention to recent steps by the Fed and other federal agencies to cut red tape by simplifying several regulatory requirements.