Yellen says the government could backstop more deposits if necessary to stop contagion

Treasury Secretary Janet Yellen said Tuesday the government is ready to provide further guarantees of deposits if the banking crisis worsens.

In remarks prepared for a speech to the American Bankers Association, the former Federal Reserve chair said authorities believe they have taken appropriate actions to stem liquidity problems in the sector, but will do more if needed.

“The steps we took were not focused on aiding specific banks or classes of banks. Our intervention was necessary to protect the broader U.S. banking system,” Yellen said. “And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.”