As the US economy gains strength, the near-collapse of the U.S. financial system after the fall
of Lehman Brothers in 2008 is fading from the memories of most
Americans. On Wednesday, Federal Reserve chief Janet Yellen warned the
United States is still at risk of something similar happening again.
Testifying before the House Financial Services Committee, Yellen said “substantial compliance and risk management issues” remain at some of the larger financial firms that the Fed regulates. She didn’t get into specifics, but her message to lawmakers was clear: Banks are healthier than they were at the start of the Great Recession, but they still aren’t in tip-top shape — and that poses a risk to the U.S. economy.
“While we have seen some evidence of improved risk management, internal controls, and governance … compliance breakdowns in recent years have undermined confidence,” Yellen said in prepared testimony. She was speaking specifically of 16 large financial companies, including the biggest U.S. banks, that are overseen by the Fed.
“[This] could have implications for financial stability, given the firms’ size, complexity, and interconnectedness,” Yellen said.
Read more: Yellen: U.S. Banks Are Still a Risk to Financial Stability | Foreign Policy
Testifying before the House Financial Services Committee, Yellen said “substantial compliance and risk management issues” remain at some of the larger financial firms that the Fed regulates. She didn’t get into specifics, but her message to lawmakers was clear: Banks are healthier than they were at the start of the Great Recession, but they still aren’t in tip-top shape — and that poses a risk to the U.S. economy.
“While we have seen some evidence of improved risk management, internal controls, and governance … compliance breakdowns in recent years have undermined confidence,” Yellen said in prepared testimony. She was speaking specifically of 16 large financial companies, including the biggest U.S. banks, that are overseen by the Fed.
“[This] could have implications for financial stability, given the firms’ size, complexity, and interconnectedness,” Yellen said.
Read more: Yellen: U.S. Banks Are Still a Risk to Financial Stability | Foreign Policy
