I’ve been pretty harsh in this column on Federal Reserve monetary policy, but the one area that I haven’t written much about– financial regulation – is probably the main area where the Fed does deserve a lot of credit.
In her speech at the Jackson Hole symposium late last week, Fed Chair Janet Yellen probably disappointed a lot of market watchers for her failure to talk about interest rates or unwinding the Fed’s balance sheet. Instead, she spent most of her speech defending the Fed’s actions in the regulatory realm in the wake of the global financial crisis and pushed back against critics who want to roll back those regulations, including President Trump, who vowed that he wants to “do a big number” on Dodd-Frank.
If Yellen wants to be reappointed to her position by Trump when it ends in February, she certainly didn’t sound like it. Then again, making comments in opposition to Trump is hardly a heroic stance.
Still, she deserves credit for defending the Fed’s position on bank regulation, and the next Fed chair, whether it’s Yellen, Gary Cohn, or someone else, should stick with the current policy, which will go a long way toward keeping our banking system safe and secure and make sure that the global financial crisis doesn’t repeat itself. After all, if you can’t trust keeping your money in a bank, nothing else matters. Continue reading "Fed Can't Backtrack On Regulatory Reforms"