The most important from Janet Yellen's speech

Fed Chair Janet Yellen said Tuesday that banks are "very much stronger" judging by how major institutions did in the recent stress tests.

Speaking during an exchange in London with British Academy President Lord Nicholas Stern, the central bank chief said the Fed has learned lessons from the financial crisis and has brought stability to the banking system.

Banks last week passed the first round of the Fed's stress tests to see how they would perform under adverse conditions like a 10 percent unemployment rate and turbulence in commercial real estate and corporate debt.

"I think the public can see the capital positions of the major banks are very much stronger this year," Yellen said. "All of the firms passed the quantitative parts of the stress tests."

She also made a bold prediction: that another financial crisis the likes of the one that exploded in 2008 was not likely "in our lifetime."

Yellen said the Fed learned lessons from the financial crisis and is being more vigilant to find risks to the system.

"I think the system is much safer and much sounder," she said. "We are doing a lot more to try to look for financial stability risks that may not be immediately apparent but to look in corners of the financial system that are not subject to regulation, outside those areas in order to try to detect threats to financial stability that may be emerging."

Source: Bloomberg Pro Terminal

Jr Trader Alexander Kumanov

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