The United States no longer has any banks that pose a systemic risk to the entire financial system should they collapse, according to Jerome Powell, President Trump’s nominee to lead the Federal Reserve.
At his confirmation hearing on Capitol Hill this morning, Powell was asked by Sen. John Kennedy, R-La., to answer whether any too-big-to-fail banks remain.
Powell responded, “I would say not.”
Bank bailouts were a controversial but ultimately successful response to the 2007 financial crisis that nearly destroyed the U.S. economy.
Powell noted that banks are now required to have more capital and are subject to greater regulation, putting few of them at risk of folding.
He was pressed for his outlook on interest rates but offered no concrete timeline for when the Fed minght raise rates.
Markets expect the Fed will raise rataes in December and three more times in 2018.
In a slightly hawkish tone, Powell said it was important that inflation rise back to the Fed’s 2% annual target or the central bank risks losing credibility.
The material has been provided by InstaForex Company – www.instaforex.com
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