MNI BRIEF: Yellen: Will Need To Revaluate Bank Regulations

U.S. Treasury Secretary Janet Yellen said Tuesday it will be necessary to evaluate whether adjustments are necessary to bank supervision and regulation, but first the government needs to help restore the confidence of depositors.

"It will be necessary, but there's time to evaluate whether some adjustments are necessary in supervision and regulation to address the root causes of the crisis. I don't want to speculate at this point on what those adjustments might be," she told the American Bankers Association. "What I'm focused on is stabilizing our system and restoring the confidence of depositors."

Yellen said actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion but added the banking system is stabilizing. "Our banking system is sound even as it's come under some pressure," she said. "What we're seeing are contagious bank runs. We demonstrated last week that the federal government is resolute we're committed to taking actions that will mitigate financial stability risks."