Yellen: Reforms Have Made Financial System Safer

Federal Reserve Chair Janet Yellen said Tuesday that banking reforms now in place have made the financial system safer, and the world should be able to avoid the type of devastating crisis that struck the global economy in 2008.

Speaking at the British Academy in London, Yellen said that the changes that have been implemented since 2008 have made the "system much safer and much sounder,'' with banking regulators doing a better job searching for risks to financial stability.

She said that she would not go so far as to predict that the world will never be hit with another financial crisis, saying "probably that is going too far.'' But she said that with the reforms now in place, the next crisis "hopefully, it won't be in our lifetimes.''

During a question period, Yellen was asked how she would characterize her relationship with President Donald Trump, who had attacked her handling of the Fed policies as "shameful'' during last year's campaign.

Yellen declined to comment on her relationship with the president but noted that it has been a long tradition in the United States for the Fed to have a close working relationship with the administration in power.

She said she was continuing that tradition with current Treasury Secretary Steven Mnuchin, with the two officials conferring often on various issues affecting the economy and financial regulation.

"I would say that I have got a good working relationship,'' Yellen said, adding that the administration has respect for the independence of the Fed.