Early read of banks' living wills shows progress: Fed's Yellen

Reuters News
Posted: Jul 16, 2015 3:56 PM

WASHINGTON (Reuters) - Federal Reserve Chair Janet Yellen said on Thursday that a preliminary read of the living wills that large U.S. banks submitted this month showed progress.

In response to a question about reducing the amount of systemically risky banks, Yellen told the Senate Banking Committee that the U.S. central bank is trying to put in place a set of incentives that will "reduce the systemic footprint and risk of (financial) firms."

Yellen also said the Fed was on track to raise interest rates later this year, repeating what she told the U.S. House of Representatives Financial Services Committee during an appearance on Wednesday.

The Fed chief, who was speaking to Congress this week as part of her semiannual testimony on the U.S. economy and monetary policy, gave the same opening testimony to both committees.

But Yellen said on Thursday the Fed needs to be sure that it does not tighten monetary policy too late and risk having to embark on a faster pace of rate hikes to cool the economy.

(Reporting by Michael Flaherty and Megan Cassella; Editing by Paul Simao)