THE US Treasury Secretary Janet Yellen said today that the rules for regulating and supervising banks must be reviewed after Silicon Valley Bank and Signature Bank failed to ensure they could address the banking system’s current problems.

In remarks prepared for release at the National Association for Business Economics, Yellen also called for stronger regulation of the growing nonbank, or “shadow banking,” sector.

Yellen said the 2018 reduction in bank capital requirements and enhanced supervision of small and medium-sized banks with assets under $250 billion should be reconsidered.

“Any time a bank collapses, it’s a cause for serious concern. Regulatory requirements have been relaxed in recent years. I believe we need to assess the impact of these deregulation decisions and take the necessary actions in response.”

He said banking regulatory reforms enacted after the 2008 crisis helped the U.S. financial system weather shocks, including the COVID-19 pandemic.

“But the collapse of two regional banks this month shows that our work is not done,” Yellen said, adding that the financial system is significantly stronger than it was 15 years ago.

“This is perhaps best captured by the fact that we have seen relative stability across the banking sector this month, even as concerns about specific institutions have increased,” he said.

But Yellen said it was important for US regulators to consider whether existing supervisory and regulatory regimes “are adequate for the risks that banks face today. We must act to address these risks if necessary.”

Yellen repeated comments she made last week that the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) are ready to again use the same tools they used to protect depositors from the bankruptcy of SVB and Signature banks;

“And we will be prepared to take additional actions if required,” he added, without specifying what those steps might be.