FED Chair says risk of financial crisis increases if Trump deregulates economy

From today’s LA Times by Jim Puzzanghera:

Federal Reserve Chairwoman Janet L. Yellen told senators Thursday that the risk of another financial crisis would increase if some Trump administration proposals to roll back regulations were enacted.

In her second straight day of Capitol Hill testimony, she walked back her statement last month that she didn’t expect another financial crisis “in our lifetimes.”

“I think we can never be confident there won’t be another financial crisis,” Yellen told members of the Senate Banking Committee.

The U.S. has “done a great deal” since the 2008 crisis to strengthen the financial system, she said. That includes forcing banks to hold more capital to cover potential losses as part of the 2010 Dodd-Frank financial regulatory overhaul law.

“It is important that we maintain the improvements that have been put in place that mitigate the risk and the potential damage,” Yellen said.

President Trump has promised to dismantle Dodd-Frank, which Republicans have said has been too burdensome for banks.

In a report last month ordered by Trump, Treasury Secretary Steven T. Mnuchin proposed sweeping regulatory reductions, including changes that would reduce capital requirements for the biggest banks.

Yellen said she would not favor reducing those capital requirements.

Read the entire article here.