In a speech to the American Bankers Association on Tuesday, U.S. Treasury secretary Janet Yellen signaled that the government could intervene again "if smaller institutions suffer deposit runs that pose the risk of contagion.”
Also, she noted that the recent steps they took were not focused on aiding specific banks or classes of banks but were necessary to protect the broader U.S. banking system. The Treasury secretary added that the situation is stabilizing now and the system remains sound. According to Yellen, “the Fed facility and discount window lending are working as intended to provide liquidity to the banking system," and "aggregate deposit outflows from regional banks have stabilized.”
The Treasury secretary also emphasized the importance of small and midsized banks to the U.S. economy, noting that "these banks are heavily engaged in traditional banking services that provide vital credit and financial support to families and small businesses," and "increase competition in the banking sector."