By Casey Harper (The Center Square)
U.S. Treasury Secretary Janet Yellen said Tuesday that more bank bailouts could be coming.
Yellen made the comments as part of her prepared remarks at the American Bankers Association meeting in Washington, D.C. Her comments come after the federal government stepped in to shore up collapsing regional banks in recent days, raising concerns about the economy and the federal government’s role in aiding hurting financial institutions.
Yellen referenced the “swift response” to help those banks with federal funds. She said, though, that the efforts “were not focused on aiding specific banks or classes of banks.”
“Our intervention was necessary to protect the broader U.S. banking system,” she said.
Yellen raised eyebrows with her next statement.
“And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion,” Yellen said, reportedly signaling that similar action for other banks could be coming.
Yellen also tried to restore confidence in the economy.
“The situation is stabilizing, and the U.S. banking system remains sound,” she said.
Related: Yellen Answers For Biden Budget’s Tax Hikes, IRS Spending
President Joe Biden has repeatedly emphasized that taxpayers will not be on the hook for bank bailouts.
Critics, though, have cast doubt on those comments.
“The deposit insurance fund doesn’t have anywhere near enough liquidity to cover depositors,” E.J. Antoni, an economist at the Heritage Foundation, told The Center Square. “If it did, the Federal Reserve would not have had to announce an emergency lending fund to meet the demand for liquidity.
There is also dispute over the term “bailout.”
“There is no way around the reality that taxpayers are on the hook here,” Antoni added, as The Center Square previously reported. “When the FDIC runs out of cash, it simply goes to the Treasury for more, as we saw in 2009. There’s three ways to pay for that. First, the FDIC can increase its insurance premiums charged to banks.”
“But those fees that finance the FDIC are passed entirely on to customers,” Antoni added. “The second option is for the Treasury to just give the money to FDIC instead of loaning it, in which case the taxpayer is directly responsible for it. Lastly, the Fed can finance the expense by just printing the money, which causes inflation, which is a hidden tax.”
Syndicated with permission from The Center Square.
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This woman acts as though she is financially illiterate! I actually heard a radio clip of her stating that government spending does not cause inflation! I was a Business major. This is Econ 101!!!
Is anyone surprised by the economical steps that this Administration has taken since taking office and the motives to destroy America for the benefit of their puppet master pimp China.
jail time for bailout proponents!! Bad business practices invite failures that do NOT need to be rewarded. Rewarding bad business practices encourages NO lessons learned and NO change in behavior.
? where did they dig her up
Take the checkbook away from Biden and his circus! Bank bail outs will be put on the list with college loans and the endless money pit given to the Ukraine war effort. Stop the insanity now!
Biden’s plan of destroying the country is well underway.
Yellen does as she is told. Just like Biden! We are in grave danger!
Yellen should have stuck with her experience instead of kissing WH butt. She knows she screwed up by demanding low rates fm the Fed but she'll blame the Fed anyway