Janet Yellen Grilled on Bank Failures, Proposes Only Banks With Systemic Risks Get Refunded – Cryptonium

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Janet Yellen Grilled on Bank Failures, Proposes Only Banks With Systemic Risks Get Refunded

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Treasury Secretary Janet Yellen recently assured the markets that the federal government is dedicated to protecting deposits on the back of two bank failures. This includes deposits above FDIC insurance threshold through a special fund, and temporarily loosening its borrowing requirements as part of emergency measures following the crash.

However, she noted that they don’t want to set this precedent for all future bank failures. Republican members have expressed concern about whether this decision would set a standard for guaranteeing all banks in similar situations going forward.

It’s clear from Yellen’s remarks that while safeguarding depositors’ funds is important, it should not be done without careful consideration or thought given to long-term implications and potential risks associated with such actions – especially during times of economic uncertainty like now – when we’re still dealing with fallout from COVID-19 pandemic and related recessionary pressures on financial institutions worldwide.

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