Janet Yellen Clarifies Treasury's Stance On Bank Deposit Insurance Amidst Market Turbulence

U.S. Treasury Secretary Janet Yellen said Thursday that regulators are prepared to take additional steps to protect customer bank deposits if necessary.

This is in contrast to her remarks a day earlier to the Senate appropriations subcommittee when she said regulators were not looking at blanket protection for banking deposits. Bank stocks tumbled as a result, which Benzinga reported.

Yellen's new comments on Thursday were reflective of Federal Reserve Chair Jerome Powell’s comments made on Wednesday, where he indicated that regulators are prepared to take additional actions should an individual bank failure threaten to provoke a wider contagion of bank runs.

Yellen's statements came amidst the collapse of multiple U.S. regional lenders this month, with investors pushing the stock prices of once-highly regarded regional banking stocks to around multi-year lows.

She also clarified on Thursday that Treasury officials had not examined the possibility of expanding federal insurance temporarily to all U.S. bank deposits without congressional approval.

This seemed to have buoyed the market, with the S&P 500 ETF Trust SPY and the Financial Select Sector SPDR Fund XLF both sharply jumping higher following Yellen's remarks. Shares of First Republic Bank FRC mostly didn't react to Yellen's comments, opposite of a day earlier, when shares moved to the downside following her comments.

Still, Yellen's assurance that regulators are prepared to take additional steps if necessary should provide some comfort to customers who are concerned about the safety of their bank deposits.

Read Next: Block Claps Back At Short Seller Who Is Targeting Jack Dorsey, Adani: 'Factually Inaccurate And Misleading'

Photo: Shutterstock