Moreover, setting a floor for the unemployment rate recognizes the fact that not only do cyclical systemic risks build up at financial intermediaries during robust expansions, but that these risks are also easily obscured by the buoyant environment.
ILCs are state-chartered banks that have virtually all of the powers and privileges of other insured commercial banks, including the protections of the federal safety net – deposit insurance and access to the Federal Reserve's discount window and payments system. Nonetheless, ILCs operate under a special exception to the federal Bank Holding Company Act (BHC Act).