Central banks could keep interest rates higher for longer as they fight to curb inflation that remains stubbornly high in many countries—and slow their economies by doing so. Such an environment hasn’t confronted the world’s financial markets in a generation. That means financial supervisors must sharpen their analytical tools and regulatory responses to address emerging threats. And the new risks gathering in the banking system and beyond mean it’s time to redouble efforts to identify the weakest lenders. Accordingly, we enhanced our stress-testing tools to focus on risks from rising interest rates and incorporate ... (full story)