Yellen says pressure remains on some U.S. regional bank stocks but system is sound

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WASHINGTON, May 8 (Reuters) – U.S. Treasury Secretary Janet Yellen said on Monday that the share prices of some regional banks remained under pressure, but deposits had stabilized and regulators were ready to use the same tools used in recent bank bailouts should further contagion fears arise.

Yellen told CNBC in a live interview that some of the bank stock selling was due to earnings pressure, but added that “the bar is high enough” to impose controls on short selling. bank stocks.

“We don’t see any substantial runoff from the fields,” Yellen said. “So there are pressures on equity prices, but our banking system is well capitalized, it has access to liquidity and regulators are ready to use the same tools we had in the past if new pressures arise that could create a contagion.”

Asked if she would support a temporary ban on short selling bank stocks to ease pressure on regional banks, she said that was up to the Securities and Exchange Commission (SEC) to decide, and that the last use of these controls in 2008 may have made matters worse.

“If there is evidence of market manipulation, that’s something the SEC could certainly take action against. But shorting more broadly, the bar is high enough to put controls on,” Yellen said.

Reporting by David Lawder and Andrea Shalal; Editing by Jamie Freed

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