Individual policymakers will sometimes differ in their assessments and on the relative weight they put on particular vulnerabilities. My own assessment is that, while risks are above normal in some areas and below normal in others, overall financial stability vulnerabilities are at a moderate level. 13 In my view, the most important feature of the stability landscape is the strength of the financial system.
The risks of destabilizing runs are far lower than in the past. The institutions at the heart of the financial system are more resilient. The stress tests routinely feature extremely severe downturns in business credit, and the largest banks have the capital and liquidity to continue to function under such circumstances.