For example, transparent and clearly communicated policies make it easier for regulated entities to know what is expected of them and how best to comply. Of course, as with any large-scale, complex undertaking, the standards adopted over the past decade can undoubtedly be improved. At the Fed, we are committed to transparency as we assess the efficacy and efficiency of post-crisis reforms.
In a sense, stress testing is itself a step forward in transparency. Pre-crisis, supervisors’ views of the risks facing our most systemically important firms--and the firms’ ability to understand and survive these risks--were shrouded in secrecy. Postcrisis, as part of our stress-testing regime, these supervisory views and expectations are transparent.