Brainard Says Fed Won't Dictate Where Banks Can Lend

The transcript discusses the role of stress tests in capital planning for large financial institutions, including the consideration of geo-economic risks like Brexit. It outlines supervisory guidance for risk management frameworks, emphasizing that banks should measure, monitor, and manage their material risks without dictating specific sectors for lending. The speaker clarifies that these practices are more relevant for large institutions rather than small ones, which have a smaller footprint. The focus is on ensuring consistent expectations across jurisdictions.

What are stress tests related to in large financial institutions?

How does the speaker view the inclusion of climate risks in stress tests?

What is the supervisory guidance approach mentioned for large institutions?

What does the speaker imply about the risk management framework of large institutions?

What distinction does the speaker make between large and small financial institutions?