Moreover, we will be looking at all activities within a consolidated organization that can create risk to the firm and the financial system, not just those that increase risk for insured depository institutions within the larger firm. A quantitative surveillance mechanism for large, complex financial organizations will be an essential component of our multidisciplinary approach.
We will use supervisory information, firm-specific data, and financial market data to identify developing strains and imbalances that may affect multiple institutions, as well as specific firms. As in the stress tests, our staff members will conduct forward-looking scenario analyses to gauge the potential effects of adverse changes in the operating environment on individual firms and on the system as a whole.