Janet Yellen testified before the House Financial Services Committee on the Federal Reserve’s semiannual monetary policy report to congress. Several House Representatives questioned Yellen about more recent implementations of the Dodd-Frank Act.
Rep. Bill Huizenga (R-Mich) asked Yellen whether she thinks the Volcker Rule will cause U.S. banks to face a competitive disadvantage vis-à-vis foreign banks. Yellen responded saying, “the impact of the rule is something that we will monitor over time as it goes into effect”.
Rep. Brad Sherman (D-Calif.) asked whether or not the Fed will use the authority Dodd-Frank gave them to “break up those who were too big to fail”. She responded by saying, “We have a broad program that's designed to deal with too big to fail. It's the Dodd-Frank program. And we are actively completing our work there. And I'm very hopeful that that is going to effectively deal with it.”
Rep. Michael E. Capuano (D-Mass) asked whether or not Congress should consider “reinstituting some form of Glass-Steagall”. Yellen responded by noting that she thinks the issues have been or will be addressed if regulators and Congress continue on the path of completing the Dodd-Frank rulemakings.
Rep. Stephen F. Lynch (D-Mass.) inquired about the Fed’s progress on Section 956 of the Dodd-Frank Act that requires that the federal financial regulators issue a rule requiring big banks to disclose the incentive-based compensation agreements for employees who can expose the banks to excessive losses.Yellen said that they have put supervisory guidance into effect in the banks they supervise and she believes that there have been improvements in incentive compensation practices.