This is why we have required banks to hold capital in reserve well in excess of what they would hold if it was left purely to shareholders or management. We need financial institutions to be able to store capital reserves in the good times, so that they can both weather adverse economic events and deploy their capital in tougher times.
The capital buffers of banks should now be used to support their customers. Our bank economic stress tests, discussed in our May Financial Stability Report, illustrated that banks are able to continue to lend and prosper through a broad range of adverse scenarios. Sound support given to customers today will help to ensure better customer and bank outcomes tomorrow.