Federal Reserve Chairwoman Janet Yellen warned Wednesday that there is an “unacceptable” amount of abusive behavior on the part of big banks, even as she defended the central bank’s new regulations on the industry.
Citing “abuses” such as Wells Fargo’s fake accounts scandal, Yellen said there “remains conduct that really I regard as unacceptable. We want to see definitely improved compliance and we’re focused on that.”
Yellen, who was speaking at an appearance at the Commonwealth Club in San Francisco, also mentioned bank settlements for rigging foreign exchange rates, violations of the Bank Secrecy Act, and sanctions violations as examples of bad compliance by banks.
Nevertheless, “we’ve made significant progress,” Yellen said of the banking system. Banks are now required to maintain higher capital levels, and the 2010 Dodd-Frank financial reform law put in place “fantastic guidelines” for regulators to follow.
She also downplayed the possibility that U.S. financial markets are in a bubble. “At the moment I would regard risks to financial stability … as moderate,” she said.
