Treasury Secretary Janet Yellen highlighted continuing dangers to the global economy from Russia’s invasion of Ukraine and the pandemic, in prepared remarks to lawmakers on an annual financial-risk report.
“There is the potential for continued volatility and unevenness of global growth as countries continue to grapple with the pandemic,” Yellen said in the text of remarks released Monday by the Treasury Department. “Russia’s unprovoked invasion of Ukraine has further increased economic uncertainty.”
Yellen is scheduled to appear before the Senate Banking Committee at 10 a.m. Tuesday, and again before the House Financial Services Committee on Thursday to brief lawmakers on the annual report of the Financial Stability Oversight Council, which she chairs.
While she also expressed concerns about some asset valuations, the Treasury chief saw no immediate threat to the stability of financial markets.
“The US financial system has continued to function in an orderly manner, though valuations of some assets remain high compared with historical values,” she said.
In summarising the annual FSOC report, which was released in December, Yellen also said:
- While US banks weathered the pandemic well, events of March 2020 revealed that many nonbank financial institutions were vulnerable to financial stresses due to liquidity mismatches and the use of leverage
- The council continues to study ways to improve resiliency in the Treasury securities market
- The council continues to push banks to identify climate-related financial risks
- The council is drafting a report on digital assets that will identify financial stability risks and regulatory gaps