Electronics

Janet Yellen to speak at Jackson Hole Symposium

Janet Yellen to speak at Jackson Hole Symposium

News from Jackson Hole: While the Fed and ECB are looking to slowly exit years of easy monetary policy, central bankers in emerging markets are moving in the other direction. The Jackson Hole conference, sponsored by the Federal Reserve Bank of Kansas City, is in its 41st year. She warned that future crises are inevitable but said the housing meltdown taught valuable lessons.

Echoing remarks made earlier Friday by Yellen, Draghi also offered a forceful defence for continuing the robust financial regulations adopted after the 2008 meltdown, adding that there was "never a good time for lax regulation". Public Citizen supports a financial transaction tax to reduce this overheated speculation.

Ms Yellen's comments will be seen as especially controversial because President Trump is now deciding whether to re-appoint her when her present term of office ends in February next year. The president wants to unwind the reforms, which could be a factor as he considers who should next lead the central bank.

"There is more work to do", she told the audience.

Post-crisis reforms "resulted in a return of lending growth and profitability among U.S. banks", she said.

Mr Vaccari said he saw risks of a stock market correction after Jackson Hole that was unlikely to leave Europe unscathed, even though valuations in the region had become attractive again compared with their USA peers.

The dollar index, which tracks the United States currency against a basket of six other major currencies, gained 0.08 per cent to 93.22 after falling 0.4 per cent on Wednesday.

She also reviewed other requirements passed by US and global regulators in the wake of the crisis, such as higher standards for the amount of reserves banks need to hold when they lend money and requirements that banks pass regular "stress tests" to ensure they can survive downturns. Oil steadied near $48 a barrel and the 10-year Treasury yield was at 2.182%.

Yellen said some key policymakers suffer from "fading" memories about the excessive risk that triggered the 2007 financial crisis and subsequent recession, sending unemployment skyrocketing and causing a global economic panic.

She said there may be benefits to simplifying the Volcker rule, which limits proprietary trading by banking firms, but quickly said that only "modest" changes were needed.

She acknowledged, though, that lending might be less available to some borrowers with poorer credit histories. She cited the need for the bailout programs put into place in response to a liquidity crush on Wall Street and touted the effectiveness of the new regulations, such as the Dodd-Frank reforms.