with each stress test, we disclose a detailed summary of the stress test methodology, and for several key portfolios, disclose our approach to modeling loss rates, summary statistics, and modeled loss rates. 8 in 2020, we adopted the stress capital buffer, which uses the results of the stress test to inform a firm ’ s capital buffer requirements. 9 the program also provides banks with the opportunity to request reconsideration of their stress capital buffer. while our stress test is an important measure of the strength and resilience of the banking system, we must recognize that it does have limitations, as does any exercise. i ’ ll walk through three limitations and explain how they can be at least partially mitigated by incorporating multiple exploratory scenarios into our stress test program. what i mean by an exploratory scenario is a scenario that is not used to set a firm ’ s stress capital buffer requirement. i ’ ll then describe how the federal reserve could use the results of exploratory scenarios to help ensure the banking system remains strong and resilient, by allowing us to better understand potential risks and improve our supervision of those banks. as we move forward, we must remain cognizant that none of us can predict future stressful events and their consequences with confidence. see 12 c. f. r. § 252 appendixes a and b ; board of governors of the federal reserve system, 2023 stress test methodology ( washington : federal reserve board, june 2023 ), https : / / www. federalreserve. gov / publications / files / 2023 - june - supervisory - stress - test - methodology. pdf. see 2023 stress test methodology, https : / / www. federalreserve. gov / publications / files / 2023 - junesupervisory - stress - test - methodology. pdf. see board of governors of the federal reserve system, “ federal reserve board approves rule to simplify its capital rules for large banks, preserving the strong capital requirements already in place, ” news release, march 4, 2020, https : / / www. federalreserve. gov / newsevents / pressreleases / bcreg20200304a. htm. limitations of stress testing first, the current stress test uses a single scenario that is focused on a credit - driven recession and single global market shock to test the financial condition of firms. 10 a single scenario cannot cover the range of plausible

%. prices for grains and iron ore remained almost unchanged. uncertainty over the spread of the novel coronavirus, and stronger turbulence on financial and commodity markets saw the ukrainian fx market respond with deteriorated sentiment and 1 / 3 bis central bankers'speeches increased nervousness. this has led to a sizeable increase in demand for foreign currency, which exceeded the supply, starting last week. the nbu has been active on the interbank foreign exchange market since last week in order to smooth out large fluctuations of the exchange rate. this week alone, net fx sales by the nbu reached usd 700 million, and the central bank is ready to conduct more fx interventions if necessary. despite the fact that the psychological factor is the only reason for the fx market turmoil, it poses a risk of a deterioration in inflation expectations, which can later affect consumer prices. although so far the global spread of the novel coronavirus has had little effect on economic growth and inflation in ukraine, the nbu will most probably have to revise its macroeconomic forecasts in april. after all, the following consequences of the spread of the coronavirus have not yet impacted economic activity and inflation in ukraine : the downward pressure on prices and a cooling of the global economy monetary policy easing by central banks of the leading economies and ukraine ’ s trading partners in response to these processes measures taken by governments to prevent the spread of covid - 19. apart from the drop in global prices caused by the coronavirus, disinflation in ukraine will be driven by the recent rise in competition between crude oil producers. this will keep energy prices at record lows, which will also impact prices for ukrainian exports. overall, the effect of all these factors on economic growth and inflation in ukraine will be mixed, adding to the uncertainty. what other factors did the nbu consider when making its monetary policy decision today? the nbu board continued to rely on the key assumption that cooperation with the imf will continue. signing a new agreement with the imf will make the ukrainian economy less vulnerable in a time of turbulent global markets and during a period of heavy public debt repayments. investors ’ perception of ukraine will also depend on ukrainian court rulings on the responsibility and liabilities to the state of the former owners of insolvent banks. the risk arising from the global spread of the novel coronavirus could, if realized, drive the global economy into a recession and cause a significant slowdown in the ukrainian economy. a dramatic decline in global demand and investors