by David Lawder
WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen said on Thursday that bank regulation and supervision needed to be reviewed in the wake of the fall of Silicon Valley Bank and Signature Bank to ensure that current risks to the system banking are taken into account.
In the preparatory remarks for a speech expected before the National Association for Business Economics, Janet Yellen also called for stricter regulation of the parallel banking sector, known as “shadow banking”, including hedge funds or even crypto-assets.
Janet Yellen said the easing of supervision since 2018 on banks with less than $250 billion in assets needed to be reviewed.
“Whenever a bank fails, there is cause for serious concern. Regulatory requirements have been relaxed in recent years. I think it is worth assessing the impact of these deregulation decisions and taking the necessary measures accordingly,” she said.
Regulatory reforms put in place after the 2008 financial crisis helped the US financial system withstand shocks, including the pandemic, she added.
“But the failure of two regional banks this month shows that our task is not finished,” said Janet Yellen.
She said it was important for US regulators to consider whether current supervisory and regulatory regimes “are adequate for the risks banks face today.”
“We must act to address these risks if necessary,” she stressed.
(Report David Lawder; Blandine Hénault for the , edited by Tangi Salaün)
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