WASHINGTON — Federal Reserve Chair Janet Yellen cast doubt on the Trump administration’s call for a reinstatement of a Depression-era barrier between commercial and investment banking activities, saying the integration of those activities was note responsible for the financial crisis.

Speaking during her press conference following the Federal Open Market Committee’s meeting March 15, Yellen said that she has not seen any concrete proposals from the administration or anyone else that would detail how exactly to reinstate the Glass-Steagall Act.

But she suggested that such a reinstatement — regardless of how it is affected — would not likely leave the banking sector safer than it is already.

“I’ve not seen any concrete proposals along this line — I don’t really know what a 21st-century Glass-Steagall would look like,” Yellen said. “I don’t think it was the cause of the financial crisis, and I do feel we have significantly strengthened supervision of bank holding companies that incorporate investment banking activities.”

Fed Chair Janet Yellen
"At this point we don’t have a lot of time-sensitive regulations … that we would have to get out that are significant,” said Fed Chair Janet Yellen. Blooomberg News

Yellen said the most crucial reforms to emerge from the financial crisis have been a tightening of regulatory oversight, the raising of capital and liquidity levels and improved management.

“To me, an important reform in the aftermath of the crisis was to make sure that investment banking activities … were appropriately capitalized, had appropriate liquidity, and management was strengthened,” Yellen said. “Obviously, we would look at any proposals that are put forward. I’m not aware of anything concrete to react to.”

Trump’s campaign first announced his support for a reinstatement of Glass-Steagall last July, when the campaign's manager at the time, Paul Manafort, announced that the separation of commercial and investment banking would be introduced into the Republican Party platform.

The Trump administration's Treasury secretary, Steven Mnuchin, later called for a “21st-century Glass-Steagall" during his confirmation hearing, and White House press secretary Sean Spicer reiterated the president’s support for that policy last week but offered little in the way of explanation.

On Monday, Federal Deposit Insurance Corp. Vice Chairman Thomas Hoenig delivered a speech outlining a plan that would silo and separately capitalize commercial and investment banking activities within a single bank holding company while not entirely separating them. Hoenig's name has been circulated as a potential vice chairman for supervision at the Fed.

During the press conference, Yellen also said that the Fed’s regulatory calendar is “relatively light” at the moment, and that while the Fed is not necessarily adhering to a complete regulatory freeze, there are no major rules pending that would represent a material change for regulated banks.

Rep. Patrick McHenry, R-N.C., vice chair of the House Financial Services Committee and deputy majority whip for the Republican caucus, sent a letter to Yellen last month calling for the central bank to cease its participation in the Basel Committee on Banking Supervision and the Financial Stability Board.

During Yellen’s testimony before the committee Feb. 15, Rep. Ann Wagner, R-Mo., asked that the central bank voluntarily freeze its rules that were in development.

“At this point we don’t have a lot of time-sensitive regulations … that we would have to get out that are significant,” Yellen said. “We have a relatively light regulatory agenda. We do have an obligation to write the rules that Congress dictates … and so that is an ongoing obligation.”