Don't Trust the Fed's Weather Report

How safe are the biggest U.S. banks? It's OK to feel confused. Two of the banking industry's most prominent overseers, Janet Yellen and Thomas Hoenig, delivered starkly contrasting messages yesterday. Their statements aren't necessarily irreconcilable. But they do help show the extent to which the debate is still raging.

Here are some of the soothing words that Yellen, the head of the Federal Reserve, told Congress yesterday. Bank-holding companies "have improved their liquidity positions and raised capital ratios to levels significantly higher than prior to the financial crisis," she said.