Treasury Secretary Janet Yellen highlighted Biden Administration’s financial achievements and ongoing monetary stability efforts, specializing in banking, local weather change, cybersecurity, AI, and digital belongings in an affidavit to the Home Committee on Monetary Providers.
In her testimony earlier than the Committee on Monetary Providers on February 6, 2024, U.S. Treasury Secretary Janet L. Yellen offered a complete replace on the state of the U.S. financial system and the steps being taken to keep up monetary stability. Secretary Yellen pointed to the historic restoration pushed by the Biden Administration over the previous three years, highlighting robust GDP development, important inflation discount, and a wholesome labor market. She famous the rise within the prime-age labor pressure participation fee and a steady sub-4 p.c unemployment fee, marking the longest streak in 50 years. Moreover, Yellen underscored a considerable improve in family median wealth, attributing it to the biggest three-year achieve on document.
The core of Yellen’s testimony was devoted to the resilience of the U.S. monetary system, emphasizing the position of the Monetary Stability Oversight Council (FSOC) in monitoring a broad spectrum of dangers. These embody challenges from the true property sectors, geopolitical conflicts, technological developments, and the particular response to the failure of two regional banks in March 2023 to forestall wider banking system contagion.
Yellen outlined 5 key areas of focus for the FSOC, detailed in its 2023 annual report:
Banking Sector and Nonbank Monetary Establishments: Efforts to assessment capital measures, enhance resolvability at giant banks, and deal with vulnerabilities from uninsured deposits. The dangers posed by nonbank monetary establishments, together with liquidity mismatch and leverage, are additionally below scrutiny, with the Securities and Alternate Fee taking steps to deal with these points in hedge funds and different funding funds.
Local weather-Associated Monetary Stability Dangers: Enhancing evaluation efforts and coordination round climate-related dangers, selling disclosures to allow traders and monetary establishments to issue these dangers into their selections.
Cybersecurity Dangers: Bolstering protections by means of data sharing and partnerships between state and federal companies and the non-public sector.
Synthetic Intelligence in Monetary Providers: Monitoring the advantages and dangers related to AI, together with cyber and mannequin dangers, whereas encouraging continued experience and monitoring capability improvement.
Digital Property: Addressing dangers from crypto-asset platforms and worth volatility, advocating for enforcement of relevant legal guidelines and rules, and calling on Congress to cross laws regulating stablecoins and crypto-assets not labeled as securities.
Secretary Yellen’s testimony displays the administration’s dedication to sustaining financial development whereas navigating the complexities of recent monetary dangers. It underscores the significance of regulatory vigilance and legislative motion in areas like digital belongings and local weather change, very important for the long-term well being of the U.S. financial system and monetary system.
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