Janet Yellen

More than a decade after the near collapse of the financial system and the bruising fight over Dodd-Frank put the industry and a Democratic administration in conflict, President Biden and the financial services sector are allied over the COVID-19 relief plan.

Janet Yellen was confirmed by the U.S. Senate as the country's 78th Treasury secretary and the first woman to hold the job, putting her in charge of overseeing an economy that continues to be hobbled by the coronavirus pandemic.

Former Fed Chair Janet Yellen told senators that as Treasury secretary she would create a “hub” to examine the effects of a changing climate on financial institutions and create a database of companies' true owners as required by a recent anti-money-laundering bill.

Incoming administration officials, especially Treasury Secretary-designate Janet Yellen, are expected to push for stress tests, public disclosures and other requirements aimed at gauging banks' climate exposure and minimizing the threat of global warming to the financial system.

His comments came a day after the Fed announced it had formally joined an international network of central bankers and regulators focused on mitigating climate risk to the financial sector.

Time and again, Janet Yellen has warned Wall Street is piling a dangerous amount of debt onto the balance sheets of risky U.S. businesses. But as she prepares to take over as Treasury secretary, she may find it difficult to do anything quickly to rein in these markets, experts say.

The incoming administration chose a battle-tested policymaker who can draw on her nearly two decades at the Fed to help rebuild an economy still struggling from the coronavirus pandemic.

The Trump administration has compelled the Federal Reserve to shut down the Main Street Lending Program and other facilities that aid banks’ pandemic relief efforts, but President-elect Biden’s Treasury nominee could help turn the spigot back on.

Yellen, the former head of the Federal Reserve, would become the first woman to hold the nation’s top economic policy job just as the coronavirus pandemic threatens another downturn.

Large institutions say their strong capital positions allow them to reward investors, and the Fed agrees. But critics say this is the time to be preparing for a sharp downturn and continue helping those hurt by the coronavirus pandemic.

Former central bank chiefs Alan Greenspan, Paul Volcker, Janet Yellen and Ben Bernanke said the Fed must be allowed to act "free of short-term political pressures and ... without the threat of removal or demotion."

A recent proposal by the Financial Stability Oversight Council to focus less on certain nonbank firms and more on risk activities would create unintended economic harm.

The post-Dodd-Frank era is one of rightsizing and tailoring rules, but a key bloc of the regulatory brain trust believes the U.S. still lacks mechanisms that could prove helpful in a crisis.

The central bank chairman said Friday that he would not step down if asked to do so by the president, adding that he has not received any direct communications from the White House about the agency’s interest rate policy.

While they won’t be in position to enact legislation, House Democrats could use their newfound power to spotlight issues that Republicans have largely ignored, including the exploding levels of corporate debt.

Federal Reserve Chair Jerome Powell largely hewed close to his predecessor's positions in his first congressional testimony as the top central banker, but also signaled important changes when it came to paying banks interest on reserves and other topics.

Jerome Powell is the first Federal Reserve chairman in more than a decade to have any background in the private sector. That could explain changes he's implemented in his first weeks on the job.

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Powell, a former investment banker who has served as a Fed governor, was confirmed by the Senate last month to a four-year term as chair of the central bank.

The Federal Reserve on Friday slapped Wells Fargo with one of the harshest orders it has ever handed down, but the message it sent went far beyond a single institution.