Janet Yellen Quotes

Without a doubt, we do support a robust framework for aggregate capital and liquidity and stress-testing.

Our objective in regulation should be to put in place tough enough regulation and capital and liquidity standards that we level the playing field and make it costly.

You have safety and soundness as primary purpose of the Federal Reserve, the OCC, and the other agencies which control banking regulation.

It's extremely important for our banks to have more capital, higher quality capital.

We need a resilient, well-capitalized, well-regulated financial system that is strong enough to withstand even severe shocks and support economic growth by lending through the economic cycle.

Loss-absorbing capacity among banks is substantially higher as a result of both regulatory requirements and stress testing exercises.

Regulation is necessary, particularly in a sector, like the banking sector, which exposes countries and people to a risk.

Among other objectives, liquidity guidelines must take into account the risks that inadequate liquidity planning by major financial firms pose for the broader financial system, and they must ensure that these firms do not become excessively reliant on liquidity support from the central bank.

I've been telling anyone willing to listen that banks have a tendency to sit on time bombs while convincing themselves that they are conservative and nonvolatile.

Banking, I would argue, is the most heavily regulated industry in the world. Regulations don't solve things. Supervision solves things.

Strong banks want strong regulation.

Fannie Mae may have conformed to the rules but the rules didn’t conform to reality. A major bank or financial institution could meet every single regulatory requirement yet still be at the risk of collapse.

Don't act like a bank unless you are a bank. That was a really big lesson learned from 2008.

Since JPMorgan Chase announced its surprise $2 billion-and-growing trading loss, there have been renewed calls from economists, pundits, and politicians to reinstate the Glass-Steagall Act, a Depression-era law that prevented commercial banks from participating in investment banking activities.

We're charged by Congress with regulating financial institutions. We take that mission seriously. We are tough supervisors and regulators.

To enable large U.S. banks to support their clients better, the Volcker rule should be clarified.

Divestment measures would improve overall banking sector health.

Separating out banks and investment banks right now under Glass-Steagall would have very big implications to the liquidity and the capital markets and banks being able to perform necessary lending.

Higher capital requirements increase bank costs, and at least some of those costs will be passed along to bank customers and shareholders. But in the longer term, stronger prudential requirements for large banking firms will produce more sustainable credit availability and economic growth.

In the wake of the 2008 recession, Congress and the Obama Administration rightly focused financial regulation on protecting the nation's financial system from itself.

The few effective provisions of Dodd-Frank are masked by its many flaws - flaws that have been and will continue to be detrimental to the American economy and our financial future if not reversed.

The basic theory of bank regulation is that, left to their own devices, bankers would make banks too risky, so regulators and supervisors are there to make banks more boring. A bank is, roughly, a big pot of assets bought with depositors’ money; the bank owns essentially an option on those assets. If the assets go up, the bank gets a highly leveraged return; if the assets go down, the losses are largely the depositors’ (or the taxpayers’) problem. “Heads I win, tails you lose” … So banks have incentives to buy high-risk, high-return assets with as much leverage as possible, and risk-based capital regulation and prudential bank supervision counteract those incentives. The bankers — who own stock in their banks and get paid bonuses for making money — push for more risk and more volatility, and the bank supervisors push back.

Dodd-Frank and independent actions of banks go a long way in terms of progress on capital, liquidity, transparency, "living wills" (plans for winding down a bank in the event of a collapse) and resolutions.

I think we're fooling ourselves if we think that regulators are going to be able to outsmart the bankers. So, the task of designing regulatory reform is trying to make more or less foolproof regulation and that's one of the advantages of the systemic category.

The Bankers' New Clothes makes a simple, powerful argument: that banks need to raise more capital. It is entirely persuasive that the extent of their leverage makes the financial system fragile, and it clearly and patiently demolishes all the counter-arguments made by the banks and their lobbyists.