Most recently, in collaboration with the Treasury, we have begun supplying liquidity to purchasers of securitized credit. Under this program, private investors absorb credit risk up to a certain level, and the Treasury takes on the bulk of the credit risk above that level. The Federal Reserve's residual credit risk is designed to be quite small.
The types of policy tools that might be activated to address systemic risks may include counter cyclical capital buffers, enhanced liquidity requirements, forward-looking loan-loss provisioning, leverage ratios, haircut and collateral requirements in secured lending, or setting maximum loan-to-value ratios on mortgages.