Financial Stability Oversight Council i i

Financial Stability Oversight Council

The Financial Stability Oversight Council (Council) was established by the DoddFrank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and is 

charged with three primary purposes:

1. To identify risks to the financial stability of the United States that could 

arise from the material financial distress or failure, or ongoing activities, 

of large, interconnected bank holding companies or nonbank financial 

companies, or that could arise outside the financial services marketplace.

2. To promote market discipline, by eliminating expectations on the part of 

shareholders, creditors, and counterparties of such companies that the 

U.S. government will shield them from losses in the event of failure.

3. To respond to emerging threats to the stability of the U.S. 

financial system.

Pursuant to the Dodd-Frank Act, the Council consists of 10 voting members 

and 5 nonvoting members and brings together the expertise of federal financial 

regulators, state regulators, and an insurance expert appointed by the President.

The voting members are:

•	 the Secretary of the Treasury, who serves as the Chairperson of 

the Council;

•	 the Chairman of the Board of Governors of the Federal Reserve System;

•	 the Comptroller of the Currency;

•	 the Director of the Bureau of Consumer Financial Protection;

•	 the Chairman of the Securities and Exchange Commission;

•	 the Chairperson of the Federal Deposit Insurance Corporation;

•	 the Chairperson of the Commodity Futures Trading Commission;

•	 the Director of the Federal Housing Finance Agency;

•	 the Chairman of the National Credit Union Administration; and

•	 an independent member with insurance expertise who is appointed by 

the President and confirmed by the Senate for a six-year term.

The nonvoting members, who serve in an advisory capacity, are:

•	 the Director of the Office of Financial Research;

•	 the Director of the Federal Insurance Office;

•	 a state insurance commissioner designated by the state insurance 

commissioners;

•	 a state banking supervisor designated by the state banking supervisors; and

•	 a state securities commissioner (or officer performing like functions) 

designated by the state securities commissioners.

The state insurance commissioner, state banking supervisor, and state securities 

commissioner serve two-year terms.
2012 FSOC // Annual Report ii

Statutory Requirements for the Annual Report

Section 112(a)(2)(N) of the Dodd-Frank Act requires that the Annual Report 

address the following:

i. the activities of the Council;

ii. significant financial market and regulatory developments, including 

insurance and accounting regulations and standards, along with an 

assessment of those developments on the stability of the financial system;

iii. potential emerging threats to the financial stability of the 

United States;

iv. all determinations made under Section 113 or Title VIII, and the 

basis for such determinations; 

v. all recommendations made under Section 119 and the result of such 

recommendations; and 

vi. recommendations—

I. to enhance the integrity, efficiency, competitiveness, and stability 

of United States financial markets;

II. to promote market discipline; and

III. to maintain investor confidence.

Approval of the Annual Report

This Annual Report was approved unanimously by the voting members of the 

Council on July 18, 2012. Except as otherwise indicated, data cited in this report 

is as of July 6, 2012.

Abbreviations for Federal Member Agencies of the Council

•	 Department of the Treasury (Treasury)

– Office of Financial Research (OFR)

– Federal Insurance Office (FIO)

•	 Board of Governors of the Federal Reserve System (Federal Reserve)

•	 Comptroller of the Currency (OCC)

•	 Bureau of Consumer Financial Protection (CFPB)

•	 Securities and Exchange Commission (SEC)

•	 Federal Deposit Insurance Corporation (FDIC)

•	 Commodity Futures Trading Commission (CFTC)

•	 Federal Housing Finance Agency (FHFA)

•	 National Credit Union Administration (NCUA)