- Evidence of excessive risk-taking during the extended period of low interest rates and low volatility
- Markets have become more brittle because liquidity may be less available in a downturn and the risk of asset fire sales and runs in short-term wholesale funding markets remains unresolved
- Financial activity is migrating toward areas of the financial system where threats are more difficult to assess because information is not available, and that activity may be consequential
If left unaddressed, the OFR believes these threats could adversely affect financial stability. The OFR described its effort to confront these challenges, such as creating tools to help policymakers and market participants assess potential threats, using a toolkit to analyze the marcoprudential policy, working to make data standards widespread in regulatory reporting and market practices and addressing data gaps.
Read the OFR report.