11 The limited ability of the stress tests to increase loss-absorbing capacity during buoyant economic times is illustrated in the results from recent years, where scenarios have involved increasingly severe recessions and strains in corporate debt markets but generally lower declines in capital ratios. More broadly, capital ratios at the largest banks have been flat and, more recently, modestly lower.
Nonetheless, you are taking time away from professional responsibilities and families to participate in this important event, and your efforts are both commendable and valuable. My talk today will address the sometimes complex interactions between business cycles in the economy at large and financial institutions like banks and credit unions.