During an interview with Bloomberg on Friday, Treasury Secretary Janet Yellen responded to a question on whether she has confidence that no other regional or small banks will fail by stating that she doesn’t want to get into “the situations of individual banks.” But overall, the banking system is in good shape and “banks are going to be able to survive this, but we’re monitoring the situation very, very carefully.”
Yellen stated that the banks that have failed “have had some very unique characteristics that have made them vulnerable” and had profiles that are “not very common. But, look, a lot of banks, particularly regional banks, are seeing their earnings come under pressure. The amount that they’re having to pay for deposits is rising, and, in many cases, their investments are at lower interest, and their stock prices are coming under pressure. But most banks now — even including the ones that are seeing pressure on their stock prices — have solid liquidity, would be able to manage paying off uninsured depositors if they were to flee.”
Bloomberg TV Washington Correspondent Annmarie Hordern then cut in to ask, “Are you confident no other regional or small lenders will fail?”
Yellen responded, “Well, look, I don’t want to talk about the situations of individual banks. But what I see is a banking system that, overall, is well-capitalized, still has very solid earnings, and we have improved the available liquidity to the banking system and think that banks are going to be able to survive this, but we’re monitoring the situation very, very carefully.”
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