And we need to weigh those private costs against the social costs of a crisis. Figure 5 A framework for thinking about our policy goal  Output  Financial Stability Low  High  12  The question remains, how much certainty do we want, how risky do we want our financial system to be in the long-term?
Goldilocks returns with the same question what level of financial stability is too risky, too safe, or just right? To answer this we need to think about our risk tolerance for crises. Stress tests One input into informing the Reserve Bank’s risk tolerance is stress testing.