If the financial system is overleveraged, that vulnerability has to be evident at particular institutions. An institutions-oriented framework can help us keep track of sector- or institution-specific structural vulnerabilities that may be masked by our overall assessment and provides additional  3  For example, see Adrian, Covitz, and Liang (2015); Aikman and others (forthcoming); and the references therein.
-4ways to understand how distress at a particular institution or class of institutions may spill over to the wider financial system. Regardless of whether we are looking at vulnerabilities or institutions, a key feature of this monitoring framework is its forward-looking nature.