At her Senate confirmation hearing next month, Federal Reserve chair nominee Janet Yellen can expect some questions about the contrast between public remarks she made after becoming president of the Federal Reserve Bank of San Francisco in 2004 that downplayed risks to the economy, with behind the scenes “pleading with Washington” to let bank regulators crack down on risky real estate lending during the boom, Reuters reports.

Yellen is seen as having taken note of signs of a real estate bubble before many other Fed officials, but “gave little hint of it as she traveled around her district speaking to banking and business groups,” Reuters said.

By 2005, Yellen and her staff had begun to realize “there might well be a bubble,” but said in a speech that year that “arguments against trying to deflate a bubble outweigh those in favor of it.”

At her 2010 confirmation hearing to be the Fed’s vice chair, Sen. Richard Shelby claimed Yellen’s region suffered a “breakdown of regulatory oversight,” which he characterized as “lax and inappropriate.”

In hindsight, Yellen concluded, “What we have learned … is it was very hard for all of the regulators involved to take away the punch bowl in a timely way.” Source: reuters.com.

 

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription