Janet Yellen's goal is to ensure that there are no more financial crises during her lifetime, the Federal Reserve chairwoman said Friday.
Yellen unexpectedly expressed the priority she places on the safety of the financial system during a question-and-answer session in an appearance in Cleveland, when she was asked to name what she thought was the biggest threat to America.
She was in Cleveland to talk about the economy and monetary policy, topics she usually gives more airtime to than the Fed's responsibility for regulating banks and the financial system.
"The biggest challenge, I think, the Federal Reserve faces is making sure we have a strong enough and resilient enough financial system … that we do not have another financial crisis in the lifetimes of anyone in this room, and hopefully not the lifetimes of our children either," Yellen told the lunch group at the City Club in Cleveland.
"I take as the Federal Reserve's mission and our top priority — coming out of this crisis, new priority — is to be much more vigilant, much better prepared than we were in the run-up to this crisis," she added.
The Federal Reserve is mandated by Congress to promote full employment and stable prices. It also has authority to regulate and supervise banks. While the central bank has been busy implementing the new rules established by the 2010 Dodd-Frank financial reform law, it has struggled over the past half-decade to try to address unemployment after the 2008 financial crisis, a topic that Yellen has spent more time discussing publicly.
The effects of the crisis were "devastating," Yellen said, and the Fed is "very focused on promoting financial stability in everything we do," including bank supervision and monetary policy.
The Fed has been criticized by both Republicans and liberal Democrats in Congress, many of whom have argued that the problem of too-big-to-fail banks has not been sufficiently addressed, or that, in the case of Republicans, the Fed's regulatory efforts have placed a burden on businesses and slowed growth.