One important initiative in the sphere of crisis prevention is the Financial Sector Assessment Programs (FSAP), which are conducted together with the World Bank. An FSAP is designed to establish a profile of the strengths and weaknesses of the financial sector of a given country. This initiative is not only geared towards emerging market countries (EMCs) or developing countries, but also towards industrial countries.
In addition, in times of stress, demand for the safety and liquidity of ON RRPs with the central bank might increase sharply, potentially exacerbating disruptive flight-to-quality flows. 18 To mitigate these risks, the FOMC has agreed that it will use an ON RRP facility only to the extent necessary and will phase it out when it is no longer needed.