As laid out in our new Financial Stability Report, we have developed a framework to help us monitor risks to stability in our complex and rapidly evolving financial system. The framework distinguishes between shocks, that is, trigger events that can be hard to predict or influence, and vulnerabilities, defined as features of the financial system that amplify shocks.
The report is organized around four broad vulnerabilities that have been prominent in financial crises through the centuries. Each of these vulnerabilities is often found to some degree even in healthy market-based systems, and there is not, at present, any generally accepted standard for assessing at what level the vulnerabilities begin to pose serious stability risks.