Get Fed Policy: Financial Market Fragility Remains Top Of Feds Worry List

Other causes included an increase in interest rates by the Federal Reserve in August 1929 and a mild recession earlier that summer, both of which contributed to gradual declines in stock prices in September and October, eventually leading investors to panic.

In pursuit of continued financial stability, the Federal Reserve monitors the potential buildup of risks to financial stability; uses such analyses to inform Federal Reserve responses, including the design of stress-test scenarios and decisions regarding other policy tools such as the countercyclical capital buffer; ...

Faced with economic contraction, deflation, and tanking markets, the Federal Reserve resorted to unorthodox means to lower interest rates and pump liquidity into the market.

The Federal Reserve has issued private warnings to certain regional banks. The Federal Reserve has issued private warnings to banks with assets in the range of $100 billion to $250 billion, including Citizens Financial Group (CFG), Fifth Third Bancorp (FITB), and M&T Bank Corp (MTB), ing to a Bloomberg report.

In response, the Federal Reserve provided liquidity and support through a range of programs motivated by a desire to improve the functioning of financial markets and institutions, and thereby limit the harm to the US economy.

Ultimately, the Federal Reserve responded to the crisis by creating a range of emergency liquidity facilities to meet the funding needs of key nonbank market participants, including primary securities dealers, money market mutual funds, and other users of short-term funding markets, including purchasers of securitized ...

The Great Recession that began in December 2007 was believed to be the worst economic downturn the country had experienced since the Great Depression. In response, Congress passed the American Recovery and Reinvestment Act of 2009, which included $800 billion to promote economic recovery.

While the US banking sector is stable, growing vulnerabilities leave at least some institutions under a near-term threat of funding pressure and capital shortfalls, ing to Federal Reserve Bank of New York staff.