Read My Lips: No New Crisis!?

Recently, I read an article about FED chairman Janet Yellen's recent remarks made in the course of her discussion with former World Bank economist Lord Nicholas Stern at the British Academy in London (http://www.foxbusiness.com/markets/2017/06/27/yellen-dont-believe-well-see-another-financial-crisis-in-our-lifetime.html).

Ms. Yellen seems to be very optimistic about the safety of the banking system.

Further, she says "We also have changed the system in the way how derivatives work. Most standardized derivatives are centrally cleared (...) The architecture of the system has changed in important ways which have made it safer (...) The system is much safer and much sounder".

Ms. Yellen closed with following words. "Will I say there will never, ever be another financial crisis? No, probably that would be going too far. But I do think we’re much safer and I hope that it will not happen in our lifetimes and I don’t believe it will".

Contrary to Mr. Yellen's optimistic remarks, a little number of things has improved.

The FED failed to execute major reforms by e.g. breaking up the big banks and stripping them from their "too big to fail" - status. Further, derivatives still remain an issue.

So when you listen to Ms. Yellen in the future, I rather would assume the opposite!