She also advised collective hedging of the risks of supply chains of goods from authoritarian countries such as Russia and China.
In an article published in Project Syndicate in December 2022 under the title "Resilient Trade," she identified the main risks to the global economy and ways to protect against geopolitical and security risks from hostile countries. She called for moving away from supply chains that violate basic human rights.
Despite this, she acknowledged in one of her interviews with CNN that economic and financial sanctions linked to the dollar and imposed by the United States on Russia and other countries, endanger the dominance of the dollar, as targeted countries seek alternative currencies.
The dollar is used as a global currency due to the advantages that the United States enjoy and other countries lack, such as robust and sophisticated capital markets, as well as the rule of law.
During the recent banking crisis in her country, Yellen appeared on CBS' Face the Nation; she reassured her compatriots that regulators are closely monitoring the state of the banking system to ensure capital adequacy and control risks.
Speaking about the collapse of Silicon Valley Bank, she said she was working with regulators to "design appropriate policies" she didn't want to disclose.
However, she revealed several days later in a speech to the Bankers Association conference that she supported the actions taken by regulators to avoid a full-blown banking crisis.
Uninsured bank deposits, which exceed the maximum limit set by the law ($250,000) can be protected only if the bank that has failed poses a comprehensive risk to the financial system, she said; decisions in this regard deal with each case, one at a time.
She also announced the proposal made by the Financial Stability Oversight Board to consider non-bank financial companies as financial institutions within the regulatory framework and subject them to the Federal Reserve's supervision.
Digital currency with conditions
On 7 April 2022, Yellen announced, for the first time, during a meeting at the American University's Kogod School of Business, plans to issue a central bank digital currency, i.e., a digital dollar.
The move would be accompanied by studies on its impact on monetary policy, national security, international trade, and the interests of consumers and dollar holders – it's a path that, in her view, may take some time.
She outlined the framework governing mobility with and handling of digital assets in the US economy as follows:
First: The importance of the US financial system benefiting from responsible innovation.
Second: The need to keep pace with the development of this system of technology and innovation.
Third: Regulations should focus on associated activities and risks, not just on technology.
Fourth: The importance of maintaining sovereign money at the core of the financial system.
Fifth: The importance of launching a collective dialogue between the various groups concerned with the digital currency project.
Yellen boldly calls for the modernisation of the international financial institutions that emerged from the Bretton Woods conference, held at the end of World War II, to lay the foundations of the post-war monetary, financial, and economic system; she wants these institutions to effectively meet the challenges of the 21st century.
On one occasion, Yellen stated that she had been collecting stones since the age of eight, showing an early tendency to study geology, and has more than 200 different stone samples.
Over time, Yellen's holdings have diversified to add, since her school days, dozens of American and international awards, medals, and accolades in the field of excellence, economics, money, and finance.