The Council discussed the current conditions in the financial sector and noted that “although some institutions have been under pressure, the US banking system remains strong and resilient”. In addition, “permanent efforts by member institutions to monitor economic developments” were also discussed.
The Secretary of the United States Treasury, Janet Yellen, convened this Friday a tumultuous meeting by videoconference to analyze the situation of the financial sector of the country, which intervened, among others, by the president of the Federal Reserve, according to Jerome Powell. reported to the treasury by announcement.
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During the meeting, the Board heard a presentation by the staff of the Federal Reserve Bank of New York on market developments.
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The Council discussed the current conditions in the financial sector and noted that “although some institutions have been under pressure, the US banking system remains strong and resilient”. In addition, “permanent efforts by member institutions to monitor economic developments” were also discussed.
Earlier, Yellen noted that the government is not considering extending the protection to all bank deposits, ruling out the possibility of an extension to protect small-scale banks across the country.
With these statements, Yellen made the words that he announced on Tuesday before the Association of American Bankers, and where he stated that the government is ready for more deposits “if necessary” to guarantee and support, with the aim of offering guarantees and stopping contagion. if the reliance on the crisis worsens.
During his speech in the US Senate, the former president of the Federal Reserve said this Wednesday that there could be “reasonable discussions” about whether the current limit of 250,000 dollars of insurance deposits should be eliminated as part of systemic credit reform. sector at length, but this decision would require extraordinary circumstances, and probably an act of Congress.
The owner of the treasury also recalled that neither the shareholders nor the servants would be protected by the Government in the event of bankruptcy. “It is very important to make it clear that the shareholders and debtors of the failed banks have not been protected by the government and that the taxpayers have not been paid for the losses of these banks,” he said.
Yellen also indicated the need for recovery measures taken last weekend to protect the country’s banking system and economy and that due to these actions “aggregate deposit outflows from regional banks have stabilized”.
