Yellen to say bank ‘situation is stabilizing,’ smaller banks play important role

(WASHINGTON) — Treasury Secretary Janet Yellen plans to say during a speech on Tuesday that “the situation is stabilizing and the U.S. banking system remains sound,” according to excerpts of her prepared remarks provided by the Treasury Department.

“The Fed facility and discount window lending are working as intended to provide liquidity to the banking system,” she plans to say during a speech at the American Bankers Association’s summit in Washington. “Aggregate deposit outflows from regional banks have stabilized.”

She also plans to argue that the existence of smaller banks was important.

“Large banks play an important role in our economy, but so do small- and mid-sized banks,” she plans to say. “These banks are heavily engaged in traditional banking services that provide vital credit and financial support to families and small businesses. They also increase competition in the banking sector, and often have specialized knowledge and expertise in the communities they invest in.”

“Treasury is committed to ensuring the ongoing health and competitiveness of our vibrant community and regional banking institutions,” she’ll say.