Treasury Department Report
Janet Yellen, Federal Reserve Chair, commented on the recent Treasury Department report that recommends many changes to the post-recession regulatory rules. She expressed that she shares many of its goals including easing regulatory burden. She’s also in agreement with the report’s critical views of the Volcker Rule.
Yet there are areas where she’s in disagreement with the report. Yellen disagrees with the report’s assertion that regulatory burden is making it difficult for banks to lend and challenging economic growth overall. Yellen believes that banks being undercapitalized and weak are the main factors making it difficult to lend.
Other Important Changes
Her comments came on the heels of other important changes. The Federal Open Market Committee just increased the federal funds rate by .25% and the rate-setting committee announced its plan to draw down its balance sheet. The plan is to draw it down to a much lower level, yet higher than before the financial crisis.
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