GRAND TETON NATIONAL PARK, Wyo. — Federal Reserve Chair Janet L. Yellen had strong words for anyone suggesting that financial regulations are slowing economic growth.
In remarks delivered during the annual conference here sponsored by the Federal Reserve Bank of Kansas City, Yellen said those calling for a rollback in rules have already forgotten the lessons of just a decade ago.
“Already, for some, memories of this experience may be fading — memories of just how costly the financial crisis was and why certain steps were taken in response,” Yellen said during her speech at the event that attracts central bankers from around the world.
To the contrary of what some have argued, said Yellen, increased regulation has actually strengthened the financial system, she said, adding the Fed has seen little evidence that regulation had reduced the availability of credit to consumers. But even if that were the case, she went on to say, “financial crises cause large declines in the availability of credit for virtually everyone,” The New York Times reported.
In addition, during her remarks Yellen further warned of the risks of overconfidence, noting it was just a decade ago when policymakers came together at the same conference in Wyoming and expressed confidence in the resilience of the economy, even as it was crashing.
“The events of the crisis demanded action, needed reforms were implemented and these reforms have made the system safer,” Ms. Yellen said.