WASHINGTON: Former Federal Reserve chair Janet Yellen warned on Thursday (Oct 25) of a “huge deterioration” in corporate lending standards that could spark or worsen another economic crisis. File photo of former Federal Reserve chair Janet Yellen. (AFP/Brendan Smialowski) In an interview with The Financial Times, Yellen said the lessons of the 2008 crisis appeared to be fading amid pressure from companies on lawmakers and agencies providing oversight. “When I see what is happening politically with lobbying and the pushback on the regulators, and the priorities of some of the regulators, I am really concerned we are on the verge of forgetting about the financial crisis and the need for stronger regulation,” Yellen said. President Donald Trump has led the charge to weaken and eliminate regulations in all areas, including banking, which he said went too far and were choking off the financing companies need to expand and boost the economy. Congress reformed the post-crisis Dodd-Frank banking law to limit the size of banks that were subject to the toughest scrutiny, while financial regulators at the Federal Reserve and Treasury Department have eased oversight. In a recent decision, regulators removed Prudential Financial from the list of institutions that could pose a broader risk to the banking system, sparing the company from enhanced standards. And the Fed next week will hold a board meeting to discuss new rules to “modify” those enhanced standards. But Yellen said the loosening of oversight and standards could come back to bite the US economy, especially… [Read full story]
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