The global financial system has so far weathered the war in the Middle East and the energy shock it brought with a degree of resilience. Markets have remained broadly orderly, corrections have been contained, and shortterm funding markets have continued to function. Yet, this resilience should not be taken for granted. Because shocks could worsen, it is essential to focus on the remaining vulnerabilities and the policies that could ameliorate them. Part of the resilience so far reflects the nature of the shock itself and the way it has unfolded in markets. News related to the war has oscillated between escalation and de-escalation, including the recent two-week ceasefire. This ebb and flow has generated bouts of volatility in energy prices and asset prices, but it has not yet triggered the kind of sustained market drawdowns that give rise to acute liquidity stress, margin calls, and forced deleveraging. […]