CCAR and CLAR are applied to bank holding companies, firms that now include many of the broker-dealers and other nonbank intermediaries involved in the market-based system of intermediation. Both of these forwardlooking assessments attempt to gauge the vulnerability to a crisis by examining the capital and liquidity resources the largest bank holding companies have to withstand the stresses that accompany a severe economic downturn. 8  BIS central bankers’ speeches  References Adrian, Tobias, and Hyun Song Shin. 2008. “Liquidity, Monetary Policy, and Financial Cycles.” Federal Reserve Bank of New York Current Issues in Economics and Finance 14, no. 1 (January). Adrian, Tobias, and Hyun Song Shin. 2010. “Liquidity and Leverage.” Journal of Financial Intermediation 19, no. 3: 418–437. Adrian, Tobias, and Hyun Song Shin. 2014. “Procyclical Leverage and Value-at-Risk.” Review of Financial Studies 27, no. 2 (February): 373–403. Adrian, Tobias, and Nina Boyarchenko. 2012. “Intermediary Leverage Cycles and Financial Stability.” Federal Reserve Bank of New York Staff Reports, no. 567, August. Adrian, Tobias, and Nina Boyarchenko. 2013. “Liquidity Policies and Systemic Risk.” Federal Reserve Bank of New York Staff Reports, no.661 (December). Adrian, Tobias, and Nina Boyarchenko. 2014. “Liquidity Policies and Systemic Risk.” Federal Reserve Bank of New York Liberty Street Economics blog, April. Adrian, Tobias, Nina Boyarchenko, and Hyun Song Shin. 2015. “The Cyclicality of Leverage.” Federal Reserve Bank of New York Staff Reports, no.743 (October). Adrian, Tobias, Emmanuel Moench, and Hyun Song Shin. 2010. “Macro Risk Premium and Intermediary Balance Sheet Quantities.” International Monetary Fund Economic Review 58 (September): 179–207.

It is important to recognize that the financial crisis of 2007–09 in the United States did not include widespread runs on bank deposit accounts, the hallmark of the crisis in the early 1930s. However, there has been a growing recognition that the financial system as a whole can be fragile beyond banks, and that runs can occur on a wide range of financial intermediaries. So what is a modern recipe for a financial crisis? Menu What is a financial crisis? First, let’s define a financial crisis. There are many types of financial crises including currency crises in which the value of a country’s currency plummets, as happened in Iceland in 2008 along with its major banking crisis; fiscal crises in which a country’s government defaults on its debt or has the debt restructured, as happened in Greece in 2010 and 2014; and general financial crises, often called banking crises, which occurred in several parts of the world in 2008–09.4 What is a banking crisis, specifically? The economists Luc Laeven and Fabián Valencia (2012) have a clear definition, but similar definitions have been offered by other researchers: A banking crisis is defined as systemic if two conditions are met:  3  IndyMac did experience a run in which depositors were, in some instances, unable to withdraw their deposits as their branch closed for the day. See Kristoff and Chang, “Federal Regulators Seize Crippled IndyMac Bank,” Los Angeles Times, July 12, 2008, http://articles.latimes.com/2008/jul/12/business/fi-indymac12.