Treasury Secretary Janet Yellen’s words may come back to haunt her as a banking crisis looms in America and around the globe.
In 2017, Yellen – while chief of the Federal Reserve – made headlines when she said she did not "believe" another financial crisis like the crash and the Great Recession in 2008 would happen in our lifetime.
"Will I say there will never, ever be another financial crisis? No, probably that would be going too far. But I do think we’re much safer and I hope that it will not [happen] in our lifetimes and I don’t believe it will," she said in London in 2017.
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Yellen’s remarks came during a June 2017 question-answer session in London with Lord Nicholas Stern, president of the British Academy, to discuss global economic issues. Yellen said the architecture of the financial system had changed in ways that made it safer for all parties involved, citing a number of factors, including the Fed’s annual stress testing practices that simulate a crisis-like situation with significant swings in the stock market, a decline in home prices and a decline in the unemployment rate.
Yellen said while the financial system was "much safer and much sounder," the Fed and other institutions were "doing a lot more" to look for possible risks that may not be readily apparent or not subject to strict regulation.
Online denizens torched Yellen’s 2017 remarks, with popular financial Twitter account Wall Street Silver resurfacing the comments.
Journalist Jason Howerton last week blasted Yellen’s comments about future financial crises as well as her 2021 comments about inflation being "transitory."
"Janet Yellen declared as Fed Chair that there would never be another financial crisis in her lifetime," Howerton wrote. "Janet Yellen declared inflation was ‘transitory’ in 2021."
"Janet Yellen is now declaring the banking system is ‘sound,’" he continued. "Do you understand?"
Other users poked fun at Yellen’s previous statements, with one user joking that the Treasury secretary would not have seen World War II on the horizon in 1918.
"Janet Yellen in 1918: I don’t believe we’ll see another big war in our lifetime," Tradewriter wrote.
Silicon Valley Bank’s (SVB) collapse earlier this month and last week’s rush on the Fed by banks taking advantage of the emergency lending program that saw the most money borrowed since 2008’s financial crash have ignited the big, red, blinking crisis sign.
The latest data published by the Fed shows that banks borrowed $11.9 billion from the new emergency backstop known as the Bank Term Funding Program, which was rolled out on Sunday evening. The program will provide loans to banks, credit unions and other financial institutions for up to a year on highly favorable terms in exchange for collateral like Treasurys and other government-backed bonds.
Another $152.8 billion was borrowed from the discount window – the more-traditional lending facility that is used to provide liquidity to the U.S. banking system. That is up from $4.58 billion the previous week and smashes the record of $111 billion hit during the 2008 financial crisis. The discount window provides loans of up to just 90 days.
The Fed did not identify which banks received the roughly $164.8 billion in funding, nor did it specify how many requested it.
Fox News Digital's Megan Henney and Victoria Craig contributed reporting.
