Yellen Says U.S. Ready to Take More Deposit Actions If Needed

Treasury Secretary Janet Yellen told U.S. lawmakers on Thursday that regulators would be prepared for further steps to protect deposits if warranted, in new language that differs from her prepared remarks to the Senate a day earlier.

Reading prepared remarks that were almost identical to Wednesday’s, Yellen repeated her comment that the government’s recent actions were “taken to ensure that Americans’ deposits are safe.”

She followed that with a new line: “Certainly, we would be prepared to take additional actions if warranted.”

Bank stocks fluctuated after her prepared remarks were released, with the KBW Bank Index trading down about 1.7% Thursday.

“As I said last week, the US. banking system is sound. The federal government’s recent actions have demonstrated our resolute commitment to take the necessary steps to ensure that depositors’ savings remain safe,” she said in a paragraph deleted from Wednesday’s remarks.

Yellen’s updated statement Thursday was: “As I have said, we have used important tools to act quickly to prevent contagion. And they are tools we could use again. The strong actions we have taken ensure that Americans’ deposits are safe. Certainly, we would be prepared to take additional actions if warranted.”

The added comment, which she delivered before a subcommittee of the House Appropriations Committee, comes amid close scrutiny of the Biden administration’s stance on bank deposits.

On Wednesday, bank stocks tumbled after Yellen told a Senate subcommittee that Treasury officials had neither considered nor examined the possibility of expanding federal insurance temporarily to all US bank deposits without congressional approval.