Janet Yellen's Shifting Stance on Bank Stability and Deposit Insurance

Treasury Secretary Janet Yellen's mixed signals on providing a de facto guarantee on all U.S. bank deposits are becoming a threat to the financial system. On Tuesday, she said protecting uninsured depositors over $250,000 could "be warranted if smaller institutions suffer deposit runs that pose the risk of contagion." However, on Thursday, she walked back her comments from the day before, muddling the rules and the Administration's message, which requires clear, consistent rules for market confidence and financial stability.