Senate panel presses Yellen on financial regulations
WASHINGTON — Senate Democrats on Tuesday enlisted Janet Yellen, the Federal Reserve chairwoman, as an expert witness against Republican plans to roll back postcrisis financial regulations.
In testimony before the Senate Banking Committee, Yellen said repeatedly that the new safeguards were effective and that regulation was not impeding economic growth.
Sen. Sherrod Brown of Ohio, the ranking Democrat on the committee, asked Yellen whether regulation had reduced the risk of financial crises.
“I believe the financial system is much more resilient than it was,” she said.
Are businesses unable to get loans? No, Yellen responded.
Are banks unable to compete with foreign rivals? No, she said.
Are consumers better protected against predation? Yes, she said.
Brown closed with a flourish, declaring that he would summarize the testimony, “Steps taken after the crisis made our economy stronger, our financial system more stable, our banks better capitalized and our consumers better protected.”
The performance drew muted criticism from Senate Republicans, who pressed Yellen to say that the post-crisis pendulum had swung too far in the direction of regulation. In part, the tempered tone of their questions reflected the reality that Republicans are in power and free to move forward with plans to reduce regulation.
President Donald Trump has criticized the post-crisis overhaul of financial regulation as a “disaster.” He signed an executive order this month instructing the Treasury Department to assess the effect of those regulations. Republicans also are considering new legislation.
The new chairman of the banking committee, Sen. Mike Crapo, R-Idaho, said he hoped the Fed would cooperate with the Trump administration in its efforts to reduce financial regulation.