Janet Yellen Warns Another Financial Crisis Could Be Brewing
Source: Fortune
Janet Yellen, former chairwoman of the Federal Reserve, is sounding a warning bell about another financial crisis in the making, saying the loss of authority by banking regulators and the move toward deregulation are worrisome.
Yellen pointed to leverage loansthose extended to businesses with weaker creditas a primary area of concern, since regulators are currently powerless to address them at the top level. Instead, they can only focus on problems at individual banks.
I think things have improved, but then I think there are gigantic holes in the system, Yellen told a New York audience Monday night, as quoted by CNBC. Im not sure were working on [the leverage loan issue] in the way we should, and then there remain holes, and then theres regulatory pushback. So I do worry that we could have another financial crisis.
The warning is a significant course reversal for Yellen, who in 2016 said she wasnt worried about a recession, and last year said she did not believe there would be another financial crisis in our lifetime because of financial reforms. A continued push for deregulation has made her rethink that.
Read more: http://fortune.com/2018/12/11/janet-yellen-warns-another-financial-crisis-could-be-brewing/