Janet Yellen On The Financial Crisis: "I Didn’t See Any Of That Coming Until It Happened"
Ms. Yellen told the Financial Crisis Inquiry Commission in 2010 that she
and other San Francisco Fed officials pressed Washington for new
guidance, sharing the problems they were seeing. But Ms. Yellen did not
raise those concerns publicly, and she said that she had not explored
the San Francisco Fed’s ability to act unilaterally, taking the view
that it had to do what Washington said.
“For my own part,” Ms. Yellen said, “I did not see and did not
appreciate what the risks were with securitization, the credit ratings
agencies, the shadow banking system, the S.I.V.’s — I didn’t see any of
that coming until it happened.” Her startled interviewers noted that
almost none of the officials who testified had offered a similar
acknowledgment of an almost universal failure.
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