The financial system is on a “much sounder footing” today, with greater capital and liquidity, rendering it less crisis-prone, the outgoing chairman of the Federal Reserve said Wednesday.
In her last press conference as chairman, Janet Yellen told a group of reporters (following the meeting of the interest-rate setting Federal Open Market Committee) that the sound condition of the financial system today is one of the highlights of her career at the helm of the central bank.
In other comments, Yellen noted that – in the wake of the financial crisis of a decade ago – the Fed recognized it needed to devote “considerable resources” to monitoring financial stability. She said the Fed has, since then, stuck to that commitment and will continue to do so.
She told a reporter (in response to a question) that financial monitoring has not indicated a current threat to financial stability from the growth and value fluctuation of the electronic money Bitcoin. “There are no threats to core financial institutions now from Bitcoin,” the outgoing chairman said. “Undoubtedly there are individuals who would lose; but I don’t see that creating full-blown financial stability risk.”
About her future, Yellen said she and her husband (George Akerlof, a professor at Georgetown University) plan to remain in the Washington area after she leaves the Fed board (she has said she would resign the day that her nominated successor, Federal Reserve Gov. Jerome H. “Jay” Powell, is confirmed by the Senate). Powell’s nomination is now pending.
She said that she has considered it an “honor and privilege” to serve at the Fed, noting she has occupied senior positions at the central bank since 2004. She called her work on the FOMC “immensely rewarding,” and that she “feels very positive about what we’ve been able to accomplish.”
“I feel tremendous loyalty to the institution,” she said. In deciding to leave the board, she said, she made the judgment that “this is the right time for me to leave.”