These high reserve-fund balances were helpful in lessening the severity of spending cuts or tax increases in many states. Nevertheless, given the depth of the recent  4  The Southern Legislative Conference comprises the states of Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.
Economists have a name for this common-sense notion: the Tinbergen 2/4  BIS central bankers' speeches  principle. Effective supervisory, regulatory, and macroprudential policy tools appear to be well placed to address financial vulnerabilities.