The Federal Reserve is closely monitoring many indicators of financial conditions to better understand the implications of financial market developments for the economy as well as risks to the financial system itself. We are working with other regulators to make the financial system more robust and are attentive in our supervision to developments that may affect systemic risk.
These include mortgage loan-to-value ratios and amortization periods, as well as countercyclical margin requirements. What remains is much work on implementation. In particular, how best to combine, sequence and implement these tools, how they will affect financial intermediation, and their implications for other policy instruments, including monetary policy. Enforcement New rules are only as good as their application and adherence.