She believes that in June 2020, Congress left a lot of blank space in monitoring the activities of “shadow banking,” a term covering everything from asset managers and insurance companies to private equity firms. These gaps mean that the Fed must step in at the beginning of the coronavirus pandemic to prevent the debt market from collapsing as panic investors in mutual funds and other companies withdraw funds.
She said at an event hosted by the Brookings Institution: “Dodd-Frank’s power is really problematic, except for the Federal Reserve’s intervention to save us from the financial crisis. Everything has broken.”
If such a statement is confirmed as the US Treasury Secretary, it may potentially conflict with Wall Street, but Yellen (former Fed Chairman) is not a financial enemy. Nonetheless, these comments and her track record as a bank supervisor help explain why many Democrats believe she will not be troubled by financial interests.
“People in the public and private sectors seek her wisdom and trust her expertise because of her transparency and deep understanding of the problem,” one of Wall Street Congress’s toughest critics, Sherrod Brown (D-Ohio), gains momentum The chairman of the outgoing bank committee told POLITICO. “She is the kind of civil servant we need, and I thank her for returning to the public service at the height of another crisis.”
After her information was released, Jeff Hauser, the head of the progressive revolving door project, tweeted that the lecture fee “created personal feelings and a connection with the company that Yellen will now review.” But even if he said, he didn’t bother much about it.
Hauser said, “It’s unfortunate that Yellen gave a war story speech to get a large amount of cash, but considering her new role, it’s not a large sum, which is unfortunate, although he should still disclose her All the speeches.” No one thinks they are buying access. For future regulators, a story of war without secrets is very different from the advice of a strategy for selling public services. “
Yellen’s remarks in many such incidents are still inconclusive, but in public speeches to some financial companies, she has other warnings about American companies.
According to a report from Reuters at the time, at the February 2019 event hosted by the Structural Finance Association, a financial lobby group at the time was called the Structured Finance Industry Group, and Yellen warned about debts between non-financial companies Surge. She revealed that her appearance fee was $180,000.
According to reports, she said: “My concern is that if the economy encounters a downturn, we may encounter a lot of company difficulties.” “If the company is in trouble, they will lay off workers and cut investment spending. I think this may lead to The next recession will be more severe.”
The lecture fees disclosed by Yellen during the holidays include the more than $700,000 she received from Citadel, a hedge fund that is also affiliated with a broker-dealer and has four different commitments in 2019 and 2020, and 2018 The amount of another paid activity was not disclosed because it was not in the reporting period. She received approximately US$1 million from Citigroup (one of the country’s largest banks) to host 9 different speech events.
She spoke with other large companies such as Bank of America, Goldman Sachs, Credit Suisse, PIMCO, Google and Salesforce.
The focus of many conversations is her views on the economy, possible risks, how the Fed responds to these dynamics, and comments on long-term issues.
According to a wonderful video released by the company, “I think the main driving force of the trade war will be economic growth,” she revealed, paying her $225,000 for the video. The video is hosted by ING and hosted by ING. “This is the stagnation of living standards, which makes people feel desperate.”
Yellen has promised to ask the ethics lawyer of the Ministry of Finance to “seek written authorization to participate personally or substantively in any particular matter”, which involves a law firm that she received compensation from the previous year.
Other Senate Democrats defended her, saying they did not think the payment would be disqualified, even if other appointees were criticized for their more direct financial connections with the company. Hillary Clinton was famous all over the world during the 2016 presidential election, and even many Democrats are keen to collect speech fees from banks.
Senator Ron Wyden (Oregon), will chair the financial committee with jurisdiction Regarding Yellen’s confirmation, she emphasized that since leaving the Federal Reserve in early 2018, she has spoken in a series of forums, whether paid or not. “She has always been completely transparent,” Wyden said.
Recommend to Yellen Senator Elizabeth Warren of the Biden camp (Elizabeth Warren) (Democrat). The senator’s aide said that Warren “doesn’t think she should give these speeches, but based on the balance of Yellen’s track record in large financial institutions, she is supporting her nomination.
Hedge funds are one of the large financial institutions that Yellen talked about in his speech.
In her speech at the Brookings Incident in June, she said that the financial market pressures in March showed that the risks posed by hedge funds’ debt-driven investments were “very real and serious,” although she did not directly describe them as right. Market occupation is responsible.. The current regulators say they hope to get more information in this regard.
The Managed Funds Association, which represents hedge funds, stated that these companies “overcame the market turmoil in March without bringing systemic risks to the financial system”, but added that they support research on the US government debt market. structure.
Yellen once said that last year’s financial crisis should be the top priority. She said in another event hosted by Institut: “We found that the financial system did not respond flexibly to pressure, which led to the unfinished business in the current crisis, and there were reasons for worrying about the stability of the financial system.” In the same month, Montaigne.
One of her solutions: give greater power to the Financial Stability Supervisory Committee, which is chaired by the Minister of Finance and composed of financial regulatory agencies.
The board of directors designed by Dodd-Frank will have her fill in some of the gaps, including identifying large companies that, if they fail, may threaten the entire financial system and should therefore be subject to stricter supervision . But she argued that both the law itself and MetLife’s suit against the Trump administration’s refusal to appeal the body had been “completely sterilized.”
Yellen said at Brookings: “We need to change the structure of FSOC and strengthen its capabilities so that we can more effectively deal with all the problems that exist in the shadow banking industry.”
She also said that institutions like the Securities and Exchange Commission, whose mission is to ensure that the market operates properly and fairly, should be given a clear mandate to help prevent financial crises.
The meeting between Yellen (Wally Adeyemo, who is about to become Deputy Prime Minister) and the Americans for Financial Reform, a progressive monitoring organization, raised the need to strengthen financial regulation.
Adeyemo “emphasizes the commitment of the incoming government to restore and rebuild regulatory and consumer protection mechanisms and institutions, including [Consumer Financial Protection Bureau] Official information from Biden’s transition team shows.