While counterparty exposures at large institutions have constituted the traditional view of systemic risk, I would also extend the definition of systemic risk to include instances where many institutions – and not just the largest – are exposed to a common set of adverse factors, such as during the real estate, energy and agricultural collapses in the United States during the 1980s and early 1990s.
The Reserve Banks play a unique and important role in increasing our understanding of local needs and regional issues, and in the Federal Reserve Districts with large Native American populations and stakeholders, our Banks are very engaged with Indian Country activities.