Federal Reserve Issues Latest Financial Stability Report

May 11, 2023

Earlier this week, the Federal Reserve Board (“FRB”)  issued its latest semi-annual Financial Stability Report.

As it has in past iterations, the Report notes that the FRB’s monitoring framework “distinguishes between shocks to, and vulnerabilities of, the financial system,” and “focuses primarily on assessing vulnerabilities, with an emphasis on four broad categories and how those categories might interact to amplify stress in the financial system.” The four categories of vulnerabilities are (1) valuation pressures, (2) borrowing by businesses and households, (3) leverage within the financial sector, and (4) funding risks.  

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