The effectiveness of this programme was reinforced by the conclusion of our comprehensive assessment of the quality of banks’ balance sheets in autumn 2014, which provided strong incentives for banks to speed up the repair of their balance sheets. 1  See Eggertsson and Woodford (2003) and Bhattarai, Eggertsson and Gafarov (2014).
3 The Federal Reserve’s oversight of large financial institutions is aimed at ensuring the safety and soundness of individual financial institutions as well as the resiliency of the financial system. The Fed expects the banks it oversees, including the largest banks, to be financially sound. Two core elements of soundness are capital and liquidity.