As The Post has learned, Janet Yellen has once more found herself on thin ice within the Biden administration due to her botched banking crisis that keeps markets in check.
The query is when Sleepy Joe & Co. will it finally work? They should get Yellen out of her misery and end ours by handing her job over to someone who knows methods to handle the very real possibility of bank failures on a scale not seen for the reason that 2008 financial crisis and possible deep recession.
As we reported, White House politicians – the individuals who make communiqués and contribute to cabinet elections – are increasingly wary of Yellen’s ability to do the job despite her extensive résumé and years leading the Fed, individuals with direct knowledge tell the Post.
They were bitter about her botched response to inflation (remember how she said it was temporary since it exploded). That is why they outlined possible replacements last 12 months, including Secretary of Commerce Gina Raimondo and Brian Moynihan, CEO of Bank of America. Each are seen as heavyweight politicians. Unlike Yellen, they’ve real-world business experience (Yellen has worked in academia and government throughout her profession).
Nevertheless, she survived this try to remove her because her ultimate boss, the president, didn’t want to fireside a girl in such a high position, these people say. Sleepy Joe may not have much of a alternative now, given the increasing severity of what she and the country are facing: the collapse of major Silicon Valley regional banks and Signature Banks.
![Treasury Secretary Janet Yellen](https://nypost.com/wp-content/uploads/sites/2/2023/03/NYPICHPDPICT000008682223-1.jpg?w=1024)
The First Republic, with over $200 billion in assets, is on the point of collapse. Credit Suisse nearly collapsed and was forced to merge with its Swiss neighbor UBS. On Friday, investors began to panic about one other European banking giant, Deutsche Bank, and commenced predicting its collapse.
Follow The Post’s coverage of the Silicon Valley Bank collapse
Yellen’s response to this was mind-blowing from a news standpoint. White House advisers point to her quite a few flip-flops as as to whether the federal government will cover all deposits in a failing bank – even those well above the FDIC insurance threshold of $250,000. I get it, she doesn’t want people to take money out of regional banks with just a bit weakness, but what she says lacks credibility. Will the federal government or the underfunded FDIC insurance fund really cover a deposit of greater than one million dollars?
One other criticism: her slow-paced approach to the possible severity of weaknesses within the banks’ plumbing as outages begin to pile up. It says the system is secure, but in fact it isn’t. Years of historic and really low rates of interest distort asset value and risk-taking, and banks can’t be immune from the implications.
“On the one hand, they’re type of stuck together with her; it might be mistaken to do away with the treasury secretary during a banking crisis,” said certainly one of my sources, who works at a significant think tank in Washington, and heard these complaints firsthand. “Alternatively, they know they haven’t got anyone good to be their face in relation to the reply.”
![President Biden](https://nypost.com/wp-content/uploads/sites/2/2023/03/NYPICHPDPICT000001438374.jpg?w=1024)
Yellen clearly heard the criticism. On Friday, she called an emergency meeting of top banking regulators to debate the deepening crisis. This system is prone to include not only previous bank failures, but additionally the impasse over the fate of the First Republic – bankers try, up to now unsuccessfully, to save lots of this institution from being the last domino to fall into a regional banking mess.
Then comes the dreaded implosion of Deutsche Bank, which, as a result of its size, carries significant systemic risk to the whole economic system, including large banks comparable to JPMorgan and Bank of America that trade with the German giant.
I suppose you can say Yellen’s emergency is best late than never. But check your calendar: We’re in week three of a rapidly evolving banking blight that would trigger a significant recession if banks fail en masse and credit runs dry, so whatever he does remains to be way too late.
Even the people within the White House are waking as much as this sad reality.