Janet Yellen: Another financial crisis unlikely "in our lifetimes"

The head of the Fed made the case that banks are much stronger now...

Janet Yellen: Another financial crisis unlikely "in our lifetimes"

Susan Walsh / AP

The chair of the US Federal Reserve has forecast that none of us will have to worry about another financial crisis gripping the globe.

Speaking at a Q&A in London yesterday, Janet Yellen said reforms of the banking system since the 2007 crash should ensure our economic safety.

"Would I say there will never, ever be another financial crisis?" she said.

"You know probably that would be going too far but I do think we're much safer and I hope that it will not be in our lifetimes and I don't believe it will be."

Yellen also warned against the unravelling of financial reforms, arguing that US President Donald Trump's campaign proposals to cut banking regulations would "not be a good thing" and calling on those who dealt with the last crash to speak out against any such policy action in that area.

While she would not comment on her relationship with Trump, she said her regular dealings with US Treasury Secretary Steve Mnuchin have been positive:

"I would say that I've got a good working relationship [with Mnuchin]. I've found solid respect for the independence of the Fed."

Turning to the Fed lifting interest rates, she insisted no massive hikes were on the horizon, stating:

"We think it will be appropriate for the attainment of our goals to raise interest rates very gradually to levels that are likely to remain quite low, although there is uncertainty about this, to remain low by historical standards for a long time."

Two weeks ago, the Fed announced the second of three planned increases to rates. Its key rates were pushed up 25 basis points to a target range of 1.00% to 1.25%, with the Fed citing continued economic growth and job market strength in the US as the reasons for the rise.

US rates are now at their highest level in nine years.