(AmericanProsperity.com) – US Treasury Secretary Janet Yellen said during a Thursday meeting at the National Association for Business Economics that former President Donald Trump and his administration are to blame for the poor capacity of the current administration to prop up and respond to failing financial markets, considering the numerous cutbacks enacted during the Republican leader’s period at the White House.
At the meeting Yellen explained that when she and President Biden took office two years ago, they inherited a “decimated” financial stability apparatus at the Treasury Department. She added that, at that moment, she noticed that the team at the Financial Stability Oversight Council (FSOC) was considerably less numerous than in 2016. Yellen also explained that, at that year, the FSOC had a solid analysis team that the Trump administration eventually decided to eliminate.
The Treasury Secretary’s comments come after regulators decided to shut down the Signature Bank and Silicon Valley Bank (SVB), in order to save depositors, who were reimbursed for the two banks’ losses above the $250,000 standard limit of the Federal Deposit Insurance Corporation (FDIC).
In addition, Yellen praised the state intervention in the American financial sector, echoing sentiments from previous eras of international finance that have been highlighted over the last few weeks by some famous financial analysts who believe that capitalism would be about to experience a radical change.
She explained that the most important element is always confidence, even in well-regulated systems, being the reason why the government needs to act as soon as possible once people start losing confidence in the country’s banking system. Yellen pointed out that one of the ways the government can act is through forceful interventions. She closed her remarks by saying this is exactly what the Biden administration did after the two banks’ collapses, to prevent a “contagion” that could have led to unpredictable scenarios that would have severely affected the American economy.
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