WASHINGTON–Given the total environment in the market, it’s most likely for some smaller sized banks to combine, Treasury Secretary Janet Yellen stated Wednesday early morning.
“There is motivation to see some consolidation and it wouldn’t surprise me to see some of that going forward,” Yellen stated in an interview on CNBC’s “Squawk Box.”
Yellen stated she would not wish to see the varied banking system threatened by more combination, however it would be reasonable offered the pressure on profits some banks are experiencing.
Janet Yellen, United States Treasury secretary, speaks throughout the Independent Community Bankers Of America (ICBA) Capital Summit in Washington, DC, United States, on Tuesday, May 16,2023
Nathan Howard|Bloomberg|Getty Images
The Treasury secretary likewise stated she anticipates there to “be issues” in the business realty sector offered the altering method to work.
“We’ve seen such a big change in attitudes and behaviors toward remote work,” Yellen stated. “And especially in an environment of higher interest rates. I think banks are broadly preparing for some restructuring and difficulties going ahead.”
Yellen included that tension tests of the biggest banks revealed they have sufficient funds to deal with any upsets.
“My overall read is that the level of capital and liquidity in the banking system is strong and while there will be some pain associated with this, the banks should be able to handle the strain.”