In part, they find this results from location, as twothirds of counties with high levels of Black business activity pre-COVID are in the top 50 COVIDaffected areas. It also reflects thinner financial cushions (e.g., smaller cash positions, weaker bank relationships, pre-existing funding gaps) for many of these businesses entering the crisis. The Fed's Policy Response: What We've Done Turning to the Fed's policy response, there are of course limits to what central banks can do to address the uneven impact of a public health shock, or the structural inequities that were in place long before it hit. But we are determined to do what we can to limit the effects. We know from history and statistical studies that avoiding large and persistent spikes of unemployment is critical to preventing inequality from getting worse. The less advantaged tend to lose their jobs first when a recession hits, and the longer they are separated from the labor force, the harder it becomes to get hired back. Knowing this pattern, the Fed moved with unprecedented speed and scale when the crisis hit. The FOMC cut the policy rate to essentially zero and conducted asset purchases at a record pace. It also used its lender-of-last-resort powers to provide liquidity to dysfunctional markets. With assistance from the Treasury, we provided trillions of dollars in backstop lending support for households, businesses, and state and local governments. The Fed also took action to encourage banks to use their substantial capital and liquidity buffers to support the economy during this time of hardship.
At the moment, the disruption of the global value chains globally and the growth of costs are creating interruptions in certain industries and are one of the major risks to the expected economic recovery. Hence, timely monitoring of all risks and their timely identification is a current priority, in order to reduce the burden on the banks' balance sheets. According to the latest EIB survey, some of the banks in the wider CESEE region expect a certain increase in nonperforming loans in the period ahead. Upward shifts are also possible in our country, but for the time being the stress tests show sufficient resilience of the banking system, in conditions of a strong regulatory framework, cautious behavior of banks and signs of economic recovery. The central bank's policy is currently relaxed, thereby contributing to favorable conditions of financing and economic recovery, in circumstances when we have enough comfort in the foreign reserves to respond to possible shocks. Of course, given the uncertain environment, we constantly and carefully follow the trends of all indicators, relevant to the monetary policy. At the moment, almost in all countries, the growth of savings increases the sources of funding for banks and their capacity to support the economy, especially at the points that will meet the new post-pandemic requirements and will increase the growth potential. The transition to a green economy is undoubtedly one of the issues that with the pandemic has moved from the margins to the core of priorities.