In such a world, it would be imprudent to rule out sharp movements in asset prices and a deterioration in market liquidity that would test the resiliency of market infrastructure and financial institutions. While these factors have stimulated interest in both crisis deterrence and crisis management, the development of financial markets has also increased the resiliency of the financial system.
Indeed, U.S. financial markets have proved to be notably robust during some significant recent shocks, such as the sharp decline in equity prices beginning in 2000 and the failure of some large firms, including Enron and Amaranth.