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US Treasury Secretary Janet Yellen reassured senators on Tuesday that the country’s banking system remains strong and that the Federal Reserve has taken steps to address potential risks. Speaking to the Senate Banking Committee, Yellen cited the stress tests that banks undergo and the oversight provided by regulators as evidence of the system’s resilience. She also emphasized the importance of maintaining financial stability amid the pandemic and other economic challenges.

Yellen’s comments came in response to questions from senators about the potential risks posed by recent developments in the banking and financial sectors. In particular, some lawmakers expressed concern about the growth of so-called “neobanks” and other fintech companies that operate outside of the traditional banking system. Yellen acknowledged the need for appropriate regulatory oversight of these new players but also emphasized the potential benefits they can bring to consumers and the economy as a whole.

Yellen’s testimony followed a visit to Silicon Valley, where she met with tech executives to discuss a range of issues, including the role of tech companies in the financial sector. During her visit, Yellen also toured a local bank to learn about community banks’ challenges in the current economic environment.

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Primary Source: Reuters, Associated Press

Factual Confidence: High (Multiple Sources, Official Statements)

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