The one-sided credit-to-GDP gap -- measured as the difference between the level of private nonfinancial sector credit-to-GDP and its one-sided Hodrick-Prescott (HP) filtered trend (with λ=400,000) -- is a prominent variable in the decision-making framework proposed by the BCBS for the Basel III...

Unfavorable macroeconomic and financial scenarios are a core element of bank stress tests, and the degree to which variables deteriorate in a scenario--i.e., the scenario’s severity--is a central design feature of any stress test exercise

In early 2019, the Federal Open Market Committee (FOMC or the Committee) launched a comprehensive review of its monetary policy framework (MPF)—the strategies, tools, and communication practices employed by the Federal Reserve to achieve its congressionally mandated goals of maximum employment...

The question of how best to conduct monetary policy has been studied by economists for a long time. Over the past 25 years or so, attention has focused on systematic approaches to setting the short-term interest rate in a manner that effectively balances policymaker objectives

In early 2019, the Federal Open Market Committee (FOMC or the Committee) launched a comprehensive review of its monetary policy framework (MPF)—the strategies, tools, and communication practices employed by the Federal Reserve to achieve its congressionally mandated goals of maximum employment...