Federal Reserve Chair Janet Yellen says that as it seeks to ensure that the largest U.S. banks pose no undue threats to the financial system, the Fed will avoid imposing unnecessary rules on small banks.
In a speech to community bankers, Yellen says the Fed will consider any harmful effects that new regulations would have on smaller institutions.
She says that one area the Fed is examining is how to defuse threats resulting from some big banks' over-reliance on short-term funding. But Yellen says it's too early to say whether or how the Fed would address those risks.
She notes that few community banks rely on the types of short-term funding that could pose threats.