WASHINGTON, D.C. — At an annual review of the nation’s financial stability, Treasury Secretary Janet Yellen said the U.S. economy is on the right track after a historic economic recovery after the COVID-19 pandemic, but that risks to the economy remain.

“Over the past three years, the Biden Administration has driven a historic recovery. GDP growth is strong and inflation has declined significantly,” she said.

Yellen testified before the Senate Committee on Banking, Housing, and Urban Affairs Feb. 8 on the annual report of the Financial Stability Oversight Council (FSOC), a body created following the 2008 recession to identify risks to the U.S. financial system.

That stability was tested last March when two regional banks, Silicon Valley Bank and Signature Bank, suddenly collapsed.

The failures were caused in party by banks not being prepared for a rapid rise in interest rates. As the banks’ losses mounted, panicked investors began withdrawing all their money at once.

In those cases the Fed stepped in to refund investors any money they would have lost, but it launched a debate over the extent to which government should police banks’ financial risk and when government should bail out banks that take on too much risk.

“When big bets pay off, they get to cash out. And when those bets fail, they won’t have to clean up the mess. Workers and taxpayers will, always,” said Sen. Sherrod Brown, D-Ohio, who chairs the Banking Committee.

Brown has long spoken out in support of stronger oversight of banks and other financial companies, as well as stronger capital requirements. He said the federal government has taken steps to reduce risk since last year’s bank failures.

“It’s the regulators coming in and insisting to these banks that they have a chief risk officer, that they insure more of their deposits,” Brown said. “One of these banks that collapsed only insured 8 or 9 percent of its deposits.”

Brown also sponsored a bill that would penalize banks for overly risky practices, called the RECOUP Act.

The committee is also planning ahead for more long-term risks, like cybercrime, artificial intelligence and climate change.