US Treasury Secretary Janet Yellen faced questioning from legislators on Thursday, March 16, 2023, over the decision to protect uninsured money at two failed regional banks, becoming the first official from President Joe Biden’s administration to do so.
Some have criticized the move to protect uninsured deposits, which were held by customers of the failed banks, as constituting a bailout, despite assurances from the Biden administration that it is not. Yellen defended the decision, saying that it was necessary to protect the stability of the financial system and to ensure that customers did not lose their savings.
Yellen also stressed that the move was consistent with longstanding policies and practices in the banking industry, and that it did not represent a departure from previous administrations’ handling of similar situations.
The decision to protect uninsured deposits was part of a series of actions taken by Washington to address the failure of the two regional banks. Other measures included providing support to the banks’ new owners and taking steps to ensure that their failure did not pose a systemic risk to the broader financial system.
The questioning of Yellen comes amid ongoing debates in Congress about the role of government in the financial sector, and the need for additional reforms to prevent future crises. The Biden administration has emphasized its commitment to ensuring the stability and soundness of the financial system, while also addressing concerns about inequality and access to financial services.