This guidance set forth supervisory expectations for the management of risks stemming from these and other concentrations, including consideration of the effects of stressed market conditions on a bank's assets and capital. In the time since this guidance was issued, examiners report that many community banks have conducted rigorous and effective stress tests.
There is, therefore, cautious optimism in general that the painful macroeconomic adjustments of the past year have succeeded in restoring financial stability in most parts of the world, and that a basis has been laid now for some recovery in real economic activity in the depressed economies that suffered most from the East Asian crisis of the past two years.