Yellen Demurs on Resolutions, Capital Changes

Treasury Secretary Yellen was pressed at today’s HFSC hearing to comment on pending bank capital standards, the scope of FDIC coverage, and failed-bank resolutions. Although she deferred to the banking agencies, she did agree to work with Rep. Foster (D-IL) to determine if additional guidance is needed to clarify the difference between the least-cost test and systemic stability. Ms. Yellen was closely questioned about IFI policies to China and the need for U.S. sanctions, continuing to make clear that the U.S. is seeking what NSC Director Sullivan calls derisking, not decoupling. The Secretary also stood by FSOC’s positions in favor of swing pricing, stablecoin and crypto reform, and careful CBDC consideration.

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