report to the congress. ben s. bernanke ( 2012 ), “ semiannual monetary policy report to the congress, ” statement before the committee on financial services, u. s. house of representatives, february 29. bis central bankers ’ speeches ( including, potentially, the flexibility to recapitalize banks directly rather than through loans to sovereigns ), and movement toward unified supervision of euro - area banks. even with these announcements, however, europe ’ s financial markets and economy remain under significant stress, with spillover effects on financial and economic conditions in the rest of the world, including the united states. moreover, the possibility that the situation in europe will worsen further remains a significant risk to the outlook. the federal reserve remains in close communication with our european counterparts. although the politics are complex, we believe that the european authorities have both strong incentives and sufficient resources to resolve the crisis. at the same time, we have been focusing on improving the resilience of our financial system to severe shocks, including those that might emanate from europe. the capital and liquidity positions of u. s. banking institutions have improved substantially in recent years, and we have been working with u. s. financial firms to ensure they are taking steps to manage the risks associated with their exposures to europe. that said, european developments that resulted in a significant disruption in global financial markets would inevitably pose significant challenges for our financial system and our economy. the second important risk to our recovery, as i mentioned, is the domestic fiscal situation. as is well known, u. s. fiscal policies are on an unsustainable path, and the development of a credible medium - term plan for controlling deficits should be a high priority. at the same time, fiscal decisions should take into account the fragility of the recovery. that recovery could be endangered by the confluence of tax increases and spending reductions that will take effect early next year if no legislative action is taken. the congressional budget office has estimated that, if the full range of tax increases and spending cuts were allowed to take effect – a scenario widely referred to as the fiscal cliff – a shallow recession would occur early next year and about 1 – 1 / 4 million fewer jobs would be created in 2013. 3 these estimates do not incorporate the additional negative effects likely to result from public uncertainty about how these matters will be resolved. as you recall, market volatility spiked and confidence fell last summer, in part as a result

the general board of the esrb to adopt in december 2021 a recommendation to establish a pan - european systemic cyber incident coordination framework ( eu - scicf ). 11 the aim of this recommendation is to see, for example, macroprudential policy beyond banking : an esrb strategy paper, esrb, 2016. see letter to members of the european parliament on the aifmd review, esrb, 23 march 2022 ; letter to the council working party on the aifmd review, esrb, 23 march 2022 ; letter to members of the european parliament on the review of solvency ii, esrb, 2 february 2022 ; letter to the council working party on the review of solvency ii, esrb, 2 february 2022 ; letter to members of the european parliament on the solvency ii review and liquidity risk management, esrb, 16 november 2022 ; letter to the council working party on the solvency ii review and liquidity risk management, esrb, 16 november 2022 ; letter to members of the european parliament on emir review, esrb, 20 march 2023 ; letter to the council working party on emir review, esrb, 20 march 2023. see making macroprudential policy fit for the next decade, keynote speech by pablo hernandez de cos, governor of the banco de espana and chair of the advisory technical committee of the european systemic risk board, at the 6th dnb - riksbank - bundesbank macroprudential conference, june 2022. recommendation of the european systemic risk board of 2 december 2021 on a pan - european systemic cyber incident coordination framework for relevant authorities ( esrb / 2021 / 17 ). strengthen coordination between financial authorities in the eu as well as coordination between other authorities in the eu and at international level, including the bank of england. earlier this year, in february, the esrb released a report on macroprudential policy for cyberresilience. 12 the document encourages authorities across the eu to make progress on three elements : ( i ) cyber - resilience scenario testing ; ( ii ) systemic impact tolerance objectives and ( iii ) financial crisis management tools to deal with system - wide cyber incidents. this area is still work in progress – it is still in its infancy, if i may put it that way – and for this reason the esrb continues to work on an eu - wide strategy to help mitigate systemic cyber risk. the esrb aims to act as