Janet Yellen, Treasury Secretary, claimed that the banking system was sound in the wake of recent bank collapses.
“I can assure the members of this committee that our banking system works and that Americans can be confident that their deposits are available when they need them,” Yellen stated before the Senate Finance Committee. “This week’s actions show our determination to ensure that the financial system is strong and that depositors can keep their savings safe,” Yellen said.
Both Signature Bank and Silicon Valley Bank collapsed recently, raising fears about possible contagion. However, depositors at these banks have been bailed out and will not lose their funds.
According to Politico, Blaine Luetkemeyer, a Missouri Republican Representative, suggested that all bank deposits be temporarily insured by the government.
According to Luetkemeyer, “If you don’t do this it will ruin smaller banks.” “Everyone’s going take their money out, and run to JPMorgan’s or this too-big-to-fail banks, and they’re only going to get larger and everyone else is going down, which will really hurt our system.”
Yellen stated on Thursday that deficit spending is not a major reason for inflation.
.@SenRonJohnson: “Would you agree those are the top…causes of inflation: Deficit spending, high energy costs, and supply dislocations?”
YELLEN: “I don’t believe deficit spending is one of the main causes of inflation.”
SEN. JOHNSON: “You don’t?!” pic.twitter.com/rRz6glzM00
— Daily Caller (@DailyCaller) March 16, 2023
Prior to Jerome Powell’s tenure as Fed chair, Yellen was the chair of the Federal Reserve System’s board of governors for four years. She ended her term in February 2018. She is the first woman to be elected Fed chair and the first woman Treasury secretary.