US Treasury Secretary Janet Yellen said the government’s ability to respond to and support volatile financial markets has “diminished” due to cuts introduced during the administration of former President Donald Trump.
Her comments follow government intervention aimed at bailing out savers at troubled banks that cater to specialized clients of wealthy businessmen in the cryptocurrency and venture capital sectors.
Yellen said at a meeting of the National Business Economics Association: “When the President and I took office in January 2021, we inherited a financial stability apparatus in the Treasury Department that was destroyed… For example, when I took office, the FSOC (Financial Oversight Board) stability) was less than a third of what it was before. It was five years ago. In 2016, the FSOC policy, analysis and operations teams were fully staffed, and by 2021 the analysis team has been eliminated. “
“Even in a well-regulated system, public trust is key. When there are gaps in confidence in the banking system, the government must act immediately. This includes decisive intervention, as we did,” she said.
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