News Column

Yellen sees little threat to financial stability

July 2, 2014

MARTIN CRUTSINGER, AP Economics Writer



WASHINGTON (AP) Federal Reserve Chair Janet Yellen says she doesn't see a need for the Fed to start raising interest rates to address the risk that extremely low rates could destabilize the financial system.

Yellen says she does see "pockets of increased risk-taking across the financial system." But she says those threats could be addressed by an increased use of regulatory tools. Many of those tools, such as higher capital standards for banks, were put in place in response to the 2008 financial crisis, which triggered the Great Recession.

In her remarks at a conference sponsored by the International Monetary Fund, Yellen disputes criticism that the Fed contributed to the 2008 crisis by keeping interest rates too low earlier in the decade.


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Source: Associated Press


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