LONDON — Federal Reserve Chair Janet Yellen said Tuesday that she believes banking regulators have made enough improvements to the financial system that the world will not experience another financial crisis “in our lifetimes.”

Addressing an audience Tuesday at the British Academy in London, Yellen said the banking reforms put in place in recent years have made the financial system much safer. She said regulators are doing a better job of watching for the type of systemic risks that struck the global economy in 2008, bringing on the worst global downturn in seven decades.

Fed Chairman Janet Yellen told a group in London that "we have a strong banking sector that's well-capitalized and has a lot of liquidity." Photo/Frank Augstein

“Would I say there will never, ever be another financial crisis?” asked Yellen, who is 70. “You know probably that would be going too far, but I do think we are much safer, and I hope that it will not be in our lifetimes and I don’t believe it will be.”

One growing concern among some in the financial markets is that some asset prices, such as stocks and housing, are beginning to look a bit overpriced – in the way that they did before the financial crisis struck.

But Yellen said the system is better able to handle any shocks that might occur if investors began dumping assets out of concerns about a future financial threat. “I think we have a strong banking sector that’s well-capitalized and has a lot of liquidity,” she said.

Yellen said the U.S. unemployment rate, which stands at a 16-year low of 4.3 percent, is “below the level that most of my colleagues believe is sustainable in the long run.”

Yellen said most policymakers believe that as unemployment falls it will begin pushing up wages, and that will result in higher levels of inflation. The Fed has increased its Fed funds rate by a quarter point on three occasions since December, most recently this month, to a range of 1.0 percent to 1.25 percent, partly because of this concern.

Yellen declined to comment on her relationship with President Trump, but noted that it has been a long tradition for the Fed to have a close working relationship with the administration in power. Trump had attacked her handling of Fed policies as “shameful” during last year’s campaign.

She said she was continuing the Fed tradition with current Treasury Secretary Steven Mnuchin, with the two conferring often on various issues affecting the economy and financial regulation.

“I would say that I have got a good working relationship,” Yellen said.

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