I would like to conclude this discussion by emphasizing the point that the current episode of inflation posed a significant challenge to policymakers by virtue of its timing. Monetary policy responses had to be calibrated to the needs of dealing with inflation while sustaining a growth recovery in a still uncertain global environment.
To help markets better assess risk, the Federal Reserve led a horizontal review, popularly known as the stress test, of the 19 largest financial institutions to estimate the likely losses and capital requirements if economic conditions turned out to be even more severe than anticipated.