As I mentioned earlier, conditions in the banking sector have stabilized. Moreover, broader U.S. financial markets and the overwhelming majority of financial institutions have been resilient to the recent stress events. The resilience of the financial system to current salient risks can be appreciated by contrasting it to the 2008 Global Financial Crisis.
Leading up to the Global Financial Crisis, housing markets were substantially overvalued, mortgage underwriting standards were weak, and home mortgages were at substantial risk of falling underwater if house prices fell. Yet banks had limited loss-absorbing capacity and were heavily reliant on wholesale short-term funding, and interconnections across the financial system were opaque.