Thus, if a system is not well designed and able to appropriately manage the risks arising from participant defaults or operational disruptions, significant liquidity or credit problems could result. Well before the current crisis erupted, the Federal Reserve was working to strengthen the financial infrastructure that supports trading, payments, clearing, and settlement in key financial markets.
Each recession is different, but this time, the difference in the severity of the downturn among industries, business types, and occupations has been particularly dramatic. People have changed their behavior under the pandemic and in response to the containment measures. Demand for goods and services that require in-person contact has plummeted. These industries have taken a huge hit and their recovery has been slow.