Federal Register / Vol. 88, No. 82 / Friday, April 28, 2023 / Notices 26305 

1 12 U.S.C. 5321 & 5322. 

2 In a rule codified at 12 CFR 1310.3, the Council 

voluntarily committed that it would not amend or 

rescind certain interpretive guidance regarding 

nonbank financial company determinations set 

forth in Appendix A to 12 CFR part 1310 without 

providing the public with notice and an 

opportunity to comment in accordance with the 

procedures applicable to legislative rules under 5 

U.S.C. 553. Section 1310.3 does not apply to the 

Council’s issuance of rules, guidance, procedures, 

or other documents that do not amend or rescind 

Continued 

(B) solely for purposes of determining 

suitability, eligibility, or qualifications 

for Federal civilian employment or 

Federal contracts, the release of which 

would reveal the identity of a source 

who furnished information to the FDIC 

on a confidential basis, has been 

exempted from the requirements of 

subsections (c)(3); (d); (e)(1); (e)(4)(G) 

and (H); and (f) of the Privacy Act 

pursuant to 5 U.S.C. 552a(k)(2) and 

(k)(5), respectively. Note, records in this 

system that originated in another system 

of records shall be governed by the 

exemptions claimed for this system as 

well as any additional exemptions 

claimed for the other system. 

HISTORY: 

84 FR 35184 (July 22, 2019). 

Federal Deposit Insurance Corporation. 

Dated at Washington, DC, on April 24, 

2023. 

James P. Sheesley, 

Assistant Executive Secretary. 

[FR Doc. 2023–09017 Filed 4–27–23; 8:45 am] 

BILLING CODE 6714–01–P 

FEDERAL RESERVE SYSTEM 

Change in Bank Control Notices; 

Acquisitions of Shares of a Bank or 

Bank Holding Company 

The notificants listed below have 

applied under the Change in Bank 

Control Act (Act) (12 U.S.C. 1817(j)) and 

§ 225.41 of the Board’s Regulation Y (12 

CFR 225.41) to acquire shares of a bank 

or bank holding company. The factors 

that are considered in acting on the 

applications are set forth in paragraph 7 

of the Act (12 U.S.C. 1817(j)(7)). 

The public portions of the 

applications listed below, as well as 

other related filings required by the 

Board, if any, are available for 

immediate inspection at the Federal 

Reserve Bank(s) indicated below and at 

the offices of the Board of Governors. 

This information may also be obtained 

on an expedited basis, upon request, by 

contacting the appropriate Federal 

Reserve Bank and from the Board’s 

Freedom of Information Office at 

https://www.federalreserve.gov/foia/ 

request.htm. Interested persons may 

express their views in writing on the 

standards enumerated in paragraph 7 of 

the Act. 

Comments regarding each of these 

applications must be received at the 

Reserve Bank indicated or the offices of 

the Board of Governors, Ann E. 

Misback, Secretary of the Board, 20th 

Street and Constitution Avenue NW, 

Washington DC 20551–0001, not later 

than May 15, 2023. 

A. Federal Reserve Bank of Chicago 

(Colette A. Fried, Assistant Vice 

President) 230 South LaSalle Street, 

Chicago, Illinois 60690–1414: 

1. The Frederick and Ruth 

Schwertfeger Irrevocable Trust of 2019, 

Wauwatosa, Wisconsin; Frederick C. 

Schwertfeger, Elm Grove, Wisconsin, 

and Alexandra G. Solanki, Wauwatosa, 

Wisconsin, as co-trustees; to join the 

Schwertfeger Family Control Group, a 

group acting in concert, to retain voting 

shares of Sword Financial Corporation, 

and thereby indirectly retain voting 

shares of Horicon Bank, both of 

Horicon, Wisconsin, and Cornerstone 

Community Bank, Grafton, Wisconsin. 

Additionally, Alexandra G. Solanki, 

as co-trustee, of the Horicon Bank Profit 

Sharing and Employee Stock Ownership 

Plan (ESOP), Horicon, Wisconsin; to 

acquire voting shares of Sword 

Financial Corporation, and thereby 

indirectly acquire voting shares of 

Horicon Bank and Cornerstone 

Community Bank. The ESOP owns 

Sword Financial Corporation. 

Board of Governors of the Federal Reserve 

System. 

Michele Taylor Fennell, 

Deputy Associate Secretary of the Board. 

[FR Doc. 2023–09047 Filed 4–27–23; 8:45 am] 

BILLING CODE P 

FINANCIAL STABILITY OVERSIGHT 

COUNCIL 

Analytic Framework for Financial 

Stability Risk Identification, 

Assessment, and Response 

AGENCY: Financial Stability Oversight 

Council. 

ACTION: Proposed analytic framework; 

request for public comment. 

SUMMARY: The Financial Stability 

Oversight Council (Council) is 

proposing to adopt an analytic 

framework that describes the approach 

the Council expects to take in 

identifying, assessing, and responding 

to certain potential risks to U.S. 

financial stability. 

DATES: Comment due date: June 27, 

2023. 

ADDRESSES: You may submit comments 

by either of the following methods. All 

submissions must refer to the document 

title and RIN 4030–[XXXX]. 

Electronic Submission of Comments: 

You may submit comments 

electronically through the Federal 

eRulemaking Portal at https://

www.regulations.gov. Electronic 

submission of comments allows the 

commenter maximum time to prepare 

and submit a comment, ensures timely 

receipt, and enables the Council to make 

them available to the public. Comments 

submitted electronically through the 

https://www.regulations.gov website can 

be viewed by other commenters and 

interested members of the public. 

Commenters should follow the 

instructions provided on that site to 

submit comments electronically. 

Mail: Send comments to Financial 

Stability Oversight Council, Attn: Eric 

Froman, 1500 Pennsylvania Avenue 

NW, Room 2308, Washington, DC 

20220. 

All properly submitted comments will 

be available for inspection and 

downloading at https://

www.regulations.gov. 

In general, comments received, 

including attachments and other 

supporting materials, are part of the 

public record and are available to the 

public. Do not submit any information 

in your comment or supporting 

materials that you consider confidential 

or inappropriate for public disclosure. 

FOR FURTHER INFORMATION CONTACT: Eric 

Froman, Office of the General Counsel, 

Treasury, at (202) 622–1942; Devin 

Mauney, Office of the General Counsel, 

Treasury, at (202) 622–2537; or Carol 

Rodrigues, Office of the General 

Counsel, Treasury, at (202) 622–6127. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 111 of the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act (the ‘‘Dodd-Frank Act’’) established 

the Financial Stability Oversight 

Council (Council), and section 112 sets 

forth its duties and purposes, which 

include identifying risks to U.S. 

financial stability and responding to 

emerging threats to the stability of the 

U.S. financial system.1

The proposed Analytic Framework for 

Financial Stability Risk Identification, 

Assessment, and Response (Proposed 

Analytic Framework) describes the 

approach the Council expects to take in 

identifying, assessing, and responding 

to certain potential risks to U.S. 

financial stability. The Proposed 

Analytic Framework is not a binding 

rule,2 and does not establish rights or 


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Appendix A, and accordingly, it does not apply to 

the Proposed Analytic Framework. Nonetheless, in 

the interest of transparency and accountability, the 

Council has chosen to publish its Proposed 

Analytic Framework and provide an opportunity for 

public comment. 

3See, for example, Dodd-Frank Act sections 

112(a)(2), 113, 115, 120, 804, 12 U.S.C. 5322(a)(2), 

5323, 5325, 5330, 5463. 

4Courts have recognized that ‘‘an agency charged 

with a duty to enforce or administer a statute has 

inherent authority to issue interpretive rules 

informing the public of the procedures and 

standards it intends to apply in exercising its 

discretion.’’ See, for example, Production Tool v. 

Employment & Training Administration, 688 F.2d 

1161, 1166 (7th Cir. 1982). The Supreme Court has 

acknowledged that ‘‘whether or not they enjoy any 

express delegation of authority on a particular 

question, agencies charged with applying a statute 

necessarily make all sorts of interpretive choices.’’ 

See U.S. v. Mead, 533 U.S. 218, 227 (2001). 

5See Association of Flight Attendants-CWA, AFL– 

CIO v. Huerta, 785 F.3d 710 (D.C. Cir. 2015). 

6 Dodd-Frank Act Wall Street Reform and 

Consumer Protection Act (Dodd-Frank Act) section 

112(a)(1), 12 U.S.C. 5322(a)(1). 

7 Dodd-Frank Act section 112(a)(2), 12 U.S.C. 

5322(a)(2). 

obligations applicable to any person or 

entity, but is intended to help market 

participants, stakeholders, and other 

members of the public better understand 

how the Council expects to perform 

certain of its duties. 

II. Questions for Public Comment 

The Council seeks public comment on 

any aspect of the Proposed Analytic 

Framework, including the following 

questions: 

1. Will the Proposed Analytic 

Framework enable the Council to 

achieve its statutory purposes and 

perform its statutory duties? Should the 

Proposed Analytic Framework address 

additional topics? Are there topics the 

Proposed Analytic Framework 

addresses but should not? 

2. The Proposed Analytic Framework 

states that financial stability can be 

defined as the financial system being 

resilient to events or conditions that 

could impair its ability to support 

economic activity, such as by 

intermediating financial transactions, 

facilitating payments, allocating 

resources, and managing risks. Are there 

other definitions of ‘‘financial stability’’ 

the Council should consider? 

3. The Council’s monitoring for 

potential risks to financial stability may 

cover an expansive range of asset 

classes, institutions, and activities, some 

of which are noted in the Proposed 

Analytic Framework. Are there asset 

classes, institutions, and activities not 

listed in the Proposed Analytic 

Framework the Council should monitor 

for potential risks to financial stability? 

4. The Proposed Analytic Framework 

lists certain vulnerabilities that most 

commonly contribute to risk to financial 

stability: leverage; liquidity risk and 

maturity mismatch; interconnections; 

operational risks; complexity and 

opacity; inadequate risk management; 

concentration; and destabilizing 

activities. Are the Council’s descriptions 

of these vulnerabilities appropriate? 

Should the Proposed Analytic 

Framework address additional 

vulnerabilities? 

5. The Proposed Analytic Framework 

also provides sample metrics associated 

with the listed vulnerabilities. Are the 

proposed sample metrics appropriate for 

the purposes described in the Proposed 

Analytic Framework? Are there 

additional sample metrics that the 

Proposed Analytic Framework should 

incorporate? 

6. The Council has identified four 

channels as most likely to facilitate the 

transmission of the negative effects of a 

risk to financial stability: exposures; 

asset liquidation; critical function or 

service; and contagion. Do the 

transmission channels listed in the 

Proposed Analytic Framework capture 

the most likely ways in which the 

negative effects of a risk to financial 

stability could be transmitted to other 

firms or markets? Should the Council 

consider additional transmission 

channels? 

7. With respect to the vulnerabilities 

and transmission channels identified in 

the Proposed Analytic Framework, are 

there potential interactions between or 

among these vulnerabilities and 

transmission channels that the Proposed 

Analytic Framework should address? 

III. Legal Authority 

The Council has numerous authorities 

and tools under the Dodd-Frank Act to 

carry out its statutory purposes.3 As the 

agency charged by Congress with broadranging responsibilities under the DoddFrank Act, the Council has the inherent 

authority to promulgate interpretive 

guidance that explains the approach the 

Council expects to take in identifying, 

assessing, and responding to certain 

potential risks to U.S. financial 

stability.4 The Council also has 

authority to issue policy statements.5

The Proposed Analytic Framework 

describes how the Council intends to 

exercise its discretionary authority. The 

Proposed Analytic Framework does not 

have binding effect; does not impose 

duties on, or alter the rights or interests 

of, any person; and does not change the 

statutory conditions or standards for the 

Council’s actions. 

IV. Executive Orders 12866, 13563, 

14094 

Executive Orders 12866, 13563, and 

14094 direct certain agencies to assess 

costs and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Pursuant to section 3(f) of 

Executive Order 12866, the Office of 

Information and Regulatory Affairs 

within the Office of Management and 

Budget has determined that the 

Proposed Analytic Framework is not a 

‘‘significant regulatory action.’’ 

Financial Stability Oversight Council 

Analytic Framework for Financial 

Stability Risk Identification, 

Assessment, and Response 

I. Introduction 

This document describes the 

approach the Financial Stability 

Oversight Council (Council) expects to 

take in identifying, assessing, and 

responding to certain potential risks to 

U.S. financial stability. 

The Council’s practices set forth in 

this document are among the methods 

the Council uses to satisfy its statutory 

purposes: (1) to identify risks to U.S. 

financial stability 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 government will 

shield them from losses in the event of 

failure; and (3) to respond to emerging 

threats to the stability of the U.S. 

financial system.6 The Council’s 

specific statutory duties include 

monitoring the financial services 

marketplace in order to identify 

potential threats to U.S. financial 

stability and identifying gaps in 

regulation that could pose risks to U.S. 

financial stability, among others.7

Financial stability can be defined as 

the financial system being resilient to 

events or conditions that could impair 

its ability to support economic activity, 

such as by intermediating financial 

transactions, facilitating payments, 

allocating resources, and managing 

risks. Adverse events, or shocks, can 

arise from within the financial system or 

from external sources. Vulnerabilities in 

the financial system can amplify the 

impact of a shock, potentially leading to 

substantial disruptions in the provision 

of financial services. The Council seeks 


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Federal Register / Vol. 88, No. 82 / Friday, April 28, 2023 / Notices 26307 

8See Dodd-Frank Act section 112(d)(3), 12 U.S.C. 

5322(d)(3). 

9References in this document to ‘‘relevant 

financial regulatory agencies’’ may encompass a 

broader range of regulators than those included in 

the statutory definition of ‘‘primary financial 

regulatory agency’’ under Dodd-Frank Act section 

2(12), 12 U.S.C. 5301(12). 

to identify and respond to risks to 

financial stability that could impair the 

financial system’s ability to perform its 

functions to a degree that could harm 

the economy. Risks to financial stability 

can arise from widely conducted 

activities or from the activities of 

individual entities, and from long-term 

vulnerabilities or from sources that are 

new or evolving. 

This document describes the 

Council’s analytic framework for 

identifying, assessing, and responding 

to potential risks to financial stability. 

The Council seeks to reduce the risk of 

a shock arising from within the financial 

system, to improve resilience against 

shocks that could affect the financial 

system, and to mitigate financial 

vulnerabilities that may increase risks to 

financial stability. The actions the 

Council may take depend on the nature 

of the vulnerability; for example, 

vulnerabilities originating from 

activities that may be widely conducted 

in a particular sector or market over 

which a regulator has adequate existing 

authority may be addressed through an 

activity-based or industry-wide 

response; in contrast, in cases where the 

financial system relies on the ongoing 

financial activities of a small number of 

entities, such that the impairment of one 

of the entities could threaten financial 

stability, or where a particular financial 

company’s material financial distress or 

activities could pose a threat to financial 

stability, an entity-based action may be 

appropriate. The Council’s authorities, 

some of which are described in section 

II.c, are complementary, and the 

Council may select one or more of those 

authorities to address a particular risk. 

Among the many lessons of financial 

crises are that risks to financial stability 

can be diverse and build up over time, 

dislocations in financial markets and 

failures of financial companies can be 

sudden and unpredictable, and 

regulatory gaps can breed risk. The 

Council was created in the aftermath of 

the 2007–2009 financial crisis and is 

statutorily responsible for identifying 

and pre-emptively acting to address 

potential risks to financial stability. 

Many of the same factors, such as 

leverage, liquidity risk, and operational 

risk, regularly recur in different forms 

and under different conditions to 

generate risks to financial stability. At 

the same time, the U.S. financial system 

is large, diverse, and continually 

evolving, so the Council’s analytic 

methodologies adapt to address 

evolving developments and risks. 

This document is not a binding rule, 

but is intended to help market 

participants, stakeholders, and other 

members of the public better understand 

how the Council expects to perform 

certain of its duties. The Council may 

consider factors relevant to the 

assessment of a potential risk or threat 

to U.S. financial stability on a case-bycase basis, subject to applicable 

statutory requirements. The Council’s 

annual reports describe the Council’s 

work in implementing its 

responsibilities. 

II. Identifying, Assessing, and 

Addressing Potential Risks to Financial 

Stability 

a. Identifying Potential Risks 

To enable the Council to identify 

potential risks to U.S. financial stability, 

the Council, in consultation with 

relevant U.S. and foreign financial 

regulatory agencies, monitors financial 

markets, entities, and market 

developments to identify potential risks 

to U.S. financial stability. 

In light of the Council’s broad 

statutory mandate, the Council’s 

monitoring for potential risks to 

financial stability may cover an 

expansive range of asset classes, 

institutions, and activities, such as: 

• markets for debt, loans, short-term 

funds, equity securities, commodities, 

digital assets, derivatives, and other 

institutional and consumer financial 

products and services; 

• central counterparties and payment, 

clearing, and settlement activities; 

• financial entities, including banking 

organizations, broker-dealers, asset 

managers, investment companies, 

insurance companies, mortgage 

originators and servicers, and specialty 

finance companies; 

• new or evolving financial products 

and practices; and 

• developments affecting the 

resiliency of the financial system, such 

as cybersecurity and climate-related 

financial risks. 

Sectors and activities that may impact 

U.S. financial stability are often 

described in the Council’s annual 

reports. The Council reviews 

information such as historical data, 

research regarding the behavior of 

financial markets and financial market 

participants, and new developments 

that arise in evolving marketplaces. The 

Council relies on data, research, and 

analysis including information from 

Council member agencies, the Office of 

Financial Research, primary financial 

regulatory agencies, industry 

participants, and other sources.8

b. Assessing Potential Risks 

The Council works with relevant 

financial regulatory agencies 9 to 

evaluate potential risks to financial 

stability to determine whether they 

merit further review or action. The 

evaluation of any potential risk to 

financial stability will be highly factspecific, but the Council has identified 

certain vulnerabilities that most 

commonly contribute to such risks. The 

Council has also identified certain 

sample quantitative metrics that are 

commonly used to measure these 

vulnerabilities, although the Council 

may assess each of these vulnerabilities 

using a variety of quantitative and 

qualitative factors. The following list is 

not exhaustive, but is indicative of the 

vulnerabilities and metrics the Council 

expects to consider. 

• Leverage. Leverage can amplify 

risks by reducing market participants’ 

ability to satisfy their obligations and by 

increasing the potential for sudden 

liquidity strains. Leverage can arise 

from debt, derivatives, off-balance sheet 

obligations, and other arrangements. 

Leverage can arise broadly within a 

market or at a limited number of firms 

in a market. Metrics relevant for 

assessing leverage may include ratios of 

assets, risk-weighted assets, debt, 

derivatives liabilities or exposures, and 

off-balance sheet obligations to equity. 

• Liquidity risk and maturity 

mismatch. A shortfall of sufficient 

liquidity to satisfy short-term needs, or 

reliance on short-term liabilities to 

finance longer-term assets, can subject 

market participants to rollover or 

refinancing risk. These risks may force 

entities to sell assets rapidly at stressed 

market prices, which can contribute to 

broader stresses. Relevant metrics may 

include the ratio of short-term debt to 

unencumbered short-term high-quality 

liquid assets, and amounts of funding 

available to meet unexpected reductions 

in available short-term funding. 

• Interconnections. Direct or indirect 

financial interconnections, such as 

exposures of creditors, counterparties, 

investors, and borrowers, can increase 

the potential negative effect of 

dislocations or financial distress. 

Relevant metrics may include total 

assets, off-balance-sheet assets or 

liabilities, total debt, derivatives 

exposures, values of securities financing 

transactions, and the size of potential 

requirements to post margin or 


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collateral. Metrics related to the 

concentration of holdings of a class of 

financial assets may also be relevant. 

• Operational risks. Risks can arise 

from the impairment or failure of 

financial market infrastructures, 

processes, or systems, including due to 

cybersecurity vulnerabilities. Relevant 

metrics may include statistics on 

cybersecurity incidents or the scale of 

critical infrastructure. 

• Complexity or opacity. A risk may 

be exacerbated if a market, activity, or 

firm is complex or opaque, such as if 

financial transactions occur outside of 

regulated sectors or if the structure and 

operations of market participants cannot 

readily be determined. In addition, risks 

may be aggravated by the complexity of 

the legal structure of market participants 

and their activities; unavailability of 

data due to lack of regulatory or public 

disclosure requirements and by 

obstacles to the rapid and orderly 

resolution of market participants. 

Factors that generally increase the risks 

associated with complexity or opacity 

may include a large size or scope of 

activities, a complex legal or operational 

structure, activities or entities subject to 

the jurisdiction of multiple regulators, 

and complex funding structures. 

Relevant metrics may include the 

number of jurisdictions in which 

activities are conducted, and numbers of 

affiliates. 

• Inadequate risk management. A 

risk may be exacerbated if it is 

conducted without effective riskmanagement practices, including the 

absence of appropriate regulatory 

authority and requirements. In contrast, 

existing regulatory requirements or 

market practices may reduce risks by, 

for example, limiting exposures or 

leverage, increasing capital and 

liquidity, enhancing risk-management 

practices, restricting excessive risktaking, providing consolidated 

prudential regulation and supervision, 

or increasing regulatory or public 

transparency. Relevant metrics may 

include amounts of capital and 

liquidity. 

• Concentration. A risk may be 

amplified if financial exposures or 

important services are highly 

concentrated in a small number of 

entities, creating a risk of widespread 

losses or the risk that the service could 

not be replaced in a timely manner at 

a similar price and volume if existing 

providers withdrew from the market. 

Relevant metrics may include market 

shares in segments of applicable 

financial markets. 

• Destabilizing activities. Certain 

activities, by their nature, particularly 

those that are sizeable and 

interconnected with the financial 

system, can destabilize markets for 

particular types of financial instruments 

or impair financial institutions. This 

risk may arise even when those 

activities are intentional and permitted 

by applicable law, such as trading 

practices that substantially increase 

volatility in one or more financial 

markets, or activities that involve moral 

hazard or conflicts of interest that result 

in the creation and transmission of 

significant risks. 

The vulnerabilities and metrics listed 

above identify risks that may arise from 

broadly conducted activities or from a 

small number of entities; they do not 

dictate the use of a specific authority by 

the Council. Risks to financial stability 

can arise from widely conducted 

activities or from a smaller number of 

entities, and the Council’s evaluations 

and actions will depend on the nature 

of a vulnerability. While risks from 

individual entities may be assessed 

using these types of metrics, the Council 

also evaluates broader risks, such as by 

calculating these metrics on an 

aggregate basis within a particular 

financial sector. For example, in some 

cases, risks arising from widespread and 

substantial leverage in a particular 

market may be evaluated or addressed 

on a sector-wide basis, while in other 

cases risks from a single company 

whose leverage is outsized relative to 

other firms in its market may be 

considered for an entity-specific 

response. 

In addition, in most cases the 

identification and assessment of a 

potential risk to financial stability 

involves consideration of multiple 

quantitative metrics and qualitative 

factors. Therefore, the Council uses 

metrics such as those cited above 

individually and in combination, as 

well as other factors, as appropriate, in 

its analyses. 

The Council considers how the 

adverse effects of potential risks could 

be transmitted to financial markets or 

market participants and what impact the 

potential risk could have on the 

financial system. Such a transmission of 

risk can occur through various 

mechanisms, or channels. The Council 

has identified four transmission 

channels that are most likely to facilitate 

the transmission of the negative effects 

of a risk to financial stability. These 

transmission channels, which are nonexhaustive, are: 

• Exposures. Direct and indirect 

exposures of creditors, counterparties, 

investors, and other market participants 

can result in losses in the event of a 

default or decreases in asset valuations. 

In particular, market participants’ 

exposures to a particular financial 

instrument or asset class could impair 

those market participants if there is a 

default on or other reduction in the 

value of the instrument or assets. The 

potential threat to U.S. financial 

stability will generally be greater if the 

amounts of exposures are larger; if 

transaction terms provide less 

protection for counterparties; if 

exposures are correlated, concentrated, 

or interconnected with other 

instruments or asset classes; or if 

significant counterparties include large 

financial institutions. 

• Asset liquidation. A rapid 

liquidation of financial assets can pose 

a threat to U.S. financial stability when 

it causes a significant fall in asset prices 

that disrupts trading or funding in key 

markets or causes losses or funding 

problems for market participants 

holding those assets. Rapid liquidations 

can result from a deterioration in asset 

prices or market functioning that could 

pressure firms to sell their holdings of 

affected assets to maintain adequate 

capital and liquidity, which, in turn, 

could produce a cycle of asset sales that 

lead to further market disruptions. The 

potential risk is greater, for example, if 

leverage or reliance on short-term 

funding is higher, if assets are riskier 

and would experience a reduction in 

market liquidity in times of broader 

market stress, and if asset price 

volatility could lead to significant 

margin calls. 

• Critical function or service. A risk 

to financial stability can arise if there 

could be a disruption of a critical 

function or service that is relied upon 

by market participants and for which 

there are no ready substitutes that could 

provide the function or service at a 

similar price and quantity. This channel 

is more prominent when the critical 

function or service is interconnected or 

large, when operations are opaque, 

when the function or service uses or 

relies on leverage to support its 

activities, or when risk management 

practices related to operational risks are 

not sufficient. 

• Contagion. Even without direct or 

indirect exposures, contagion can arise 

from the perception of common 

vulnerabilities or exposures, such as 

business models or asset holdings that 

are similar or highly correlated. Such 

contagion can spread stress quickly and 

unexpectedly, particularly in 

circumstances where there is limited 

transparency into investment risks, 

correlated markets, or greater 

operational risks. Contagion can also 

arise when there is a loss of confidence 

in financial instruments that are treated 

as substitutes for money. In these 


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10See Dodd-Frank Act sections 112(a)(2)(A), (D), 

(E), (F). 

11 Dodd-Frank Act section 120(a), 12 U.S.C. 

5330(a). 

12 Dodd-Frank Act section 120(d)(3), 12 U.S.C. 

5330(d)(3). 

13 Dodd-Frank Act section 120(a), 12 U.S.C. 

5330(a). 

14 Dodd-Frank Act section 120(b)(2), 12 U.S.C. 

5330(b)(2). 

15The Council also has authority to issue 

recommendations to the Board of Governors of the 

Federal Reserve System (Federal Reserve Board) 

regarding the establishment of prudential standards 

and reporting and disclosure requirements 

applicable to large bank holding companies and 

nonbank financial companies subject to Federal 

Reserve Board supervision (Dodd-Frank Act section 

115, 12 U.S.C. 5325); recommendations to 

regulators, Congress, or firms in its annual reports 

(Dodd-Frank Act section 112(a)(2)(N), 12 U.S.C. 

5322(a)(2)(N)); and other recommendations to 

Congress or Council member agencies (Dodd-Frank 

Act section 112(a)(2)(D), (F), 12 U.S.C. 

5322(a)(2)(D), (F)). 

circumstances, market dislocations or 

fire sales may result in a loss of 

confidence in other financial market 

sectors or participants, propagating 

further market dislocations or fire sales. 

The presence of any of the 

vulnerabilities listed above may 

increase the potential for risks to be 

transmitted to financial markets or 

market participants through these or 

other transmission channels. The 

Council may consider these 

vulnerabilities and transmission 

channels, as well as others that may be 

relevant, in identifying financial 

markets, activities, and nonbank 

financial companies that could pose 

risks to U.S. financial stability. 

The Council may assess risks as they 

could arise in the context of a period of 

overall stress in the financial services 

industry and in a weak macroeconomic 

environment, with market 

developments such as increased 

counterparty defaults, decreased 

funding availability, and decreased asset 

prices, because in such a context, the 

risks may have a greater effect on U.S. 

financial stability. 

The Council’s work often includes 

efforts such as sharing data, research, 

and analysis among Council members 

and member agencies and their staffs; 

consulting with regulators and other 

experts regarding the scope of potential 

risks and factors that may mitigate those 

risks; and collaboratively developing 

analyses for consideration by the 

Council. As part of this work, the 

Council may also engage with market 

participants and other members of the 

public as it assesses potential risks. In 

its evaluations, the Council takes into 

account existing laws and regulations 

that have mitigated a potential risk to 

U.S. financial stability. The Council also 

takes into account the risk profiles and 

business models of market participants. 

Empirical data may not be available 

regarding all potential risks. The type 

and scope of the Council’s analysis will 

be based on the potential risk under 

consideration. In many cases, the 

Council provides information regarding 

its work in its annual reports. 

c. Addressing Potential Risks 

In light of the varying sources of risk 

described above (such as activities, 

entities, exogenous circumstances, and 

existing or emerging practices or 

conditions), the Council may take 

different approaches to respond to a 

risk, and may use multiple tools to 

mitigate a risk. These approaches may 

include acting to reduce the risk of a 

shock arising from within the financial 

system, to mitigate financial 

vulnerabilities that may increase risks to 

financial stability, or to improve the 

resilience of the financial system to 

shocks. The actions the Council takes 

may depend on the circumstances. 

When a potential risk to financial 

stability is identified, the Council’s 

Deputies Committee will generally 

direct one or more of the Council’s stafflevel committees or working groups to 

consider potential policy approaches or 

actions the Council could take to assess 

and address the risk. Those committees 

and working groups may consider the 

utility of any of the Council’s authorities 

to respond to risks to U.S. financial 

stability, including but not limited to 

those described below. 

Interagency coordination and 

information sharing. In many cases, the 

Council works with the relevant 

financial regulatory agencies at the 

federal and state levels to seek the 

implementation of appropriate actions 

to ensure a potential risk is adequately 

addressed.10 If they have adequate 

authority, existing regulators could take 

actions to mitigate potential risks to U.S. 

financial stability identified by the 

Council. There may be different 

approaches existing regulators could 

take, based on their authorities and the 

urgency of the risk, such as enhancing 

their regulation or supervision of 

companies or markets under their 

jurisdiction; restricting or prohibiting 

the offering of a product; or requiring 

market participants to take additional 

risk-management steps. If existing 

regulators can address a risk to financial 

stability in a sufficient and timely way, 

the Council generally encourages those 

regulators to do so. 

Recommendations to agencies or 

Congress. The Council may also make 

formal public recommendations to 

primary financial regulatory agencies 

under section 120 of the Dodd-Frank 

Act. Under section 120, the Council may 

provide for more stringent regulation of 

a financial activity by issuing 

nonbinding recommendations to the 

primary financial regulatory agencies to 

apply new or heightened standards and 

safeguards for a financial activity or 

practice conducted by bank holding 

companies or nonbank financial 

companies under their jurisdiction.11 In 

addition, in any case in which no 

primary financial regulatory agency 

exists for the markets or companies 

conducting financial activities or 

practices identified by the Council as 

posing risks, the Council can consider 

reporting to Congress on 

recommendations for legislation that 

would prevent such activities or 

practices from threatening U.S. financial 

stability.12 The Council will make these 

recommendations only if it determines 

that the conduct, scope, nature, size, 

scale, concentration, or 

interconnectedness of the activity or 

practice could create or increase the risk 

of significant liquidity, credit, or other 

problems spreading among bank 

holding companies and nonbank 

financial companies, U.S. financial 

markets, or low-income, minority, or 

underserved communities.13 The new or 

heightened standards and safeguards for 

a financial activity or practice will take 

costs to long-term economic growth into 

account, and may include prescribing 

the conduct of the activity or practice in 

specific ways (such as by limiting its 

scope, or applying particular capital or 

risk management requirements to the 

conduct of the activity) or prohibiting 

the activity or practice.14 In its 

recommendations under section 120, 

the Council may suggest broad 

approaches to address the risks it has 

identified. When appropriate, the 

Council may make a more specific 

recommendation. Prior to issuing a 

recommendation under section 120, the 

Council will consult with the relevant 

primary financial regulatory agency and 

provide notice to the public and 

opportunity for comment as required by 

section 120.15

Nonbank financial company 

determinations. In certain cases, the 

Council may evaluate one or more 

nonbank financial companies for an 

entity-specific determination under 

section 113 of the Dodd-Frank Act. 

Under section 113, the Council may 

determine, by a vote of not fewer than 

two-thirds of the voting members of the 

Council then serving, including an 

affirmative vote by the Chairperson of 

the Council, that a nonbank financial 

company will be supervised by the 


ddrumheller on DSK120RN23PROD with NOTICES1
26310 Federal Register / Vol. 88, No. 82 / Friday, April 28, 2023 / Notices 

16See 12 CFR part 1310. 

17 Dodd-Frank Act section 113(a)(2) and (b)(2), 12 

U.S.C. 5323(a)(2) and (b)(2). 

18 Dodd Frank Act section 803(7)(C), 12 U.S.C. 

5462(7)(C). 

19 Dodd Frank Act section 804(c), 12 U.S.C. 

5463(c). 

20 Dodd Frank Act section 805(a), 12 U.S.C. 

5464(a). 

21 Dodd Frank Act section 805(b), 12 U.S.C. 

5464(b). 

22 Dodd Frank Act section 805(c), 12 U.S.C. 

5464(c). 

23 Dodd-Frank Act section 804(a)(1). 

24 Dodd Frank Act section 803(6)(A), 12 U.S.C. 

5462(6)(A). 

25 12 CFR part 1320. 

26 Dodd Frank Act section 804(a)(2), 12 U.S.C. 

5463(a)(2). See also 12 CFR 1320.10. 

27 Dodd-Frank Act section 805(a)(1)(A), 12 U.S.C. 

5464(a)(1). 

28 Dodd-Frank Act section 805(a)(2), 12 U.S.C. 

5464(a)(2). 

29 Dodd-Frank Act section 806(a)-(b), 12 U.S.C. 

5465(a)-(b). 

Federal Reserve Board and be subject to 

prudential standards if the Council 

determines that (1) material financial 

distress at the nonbank financial 

company could pose a threat to the 

financial stability of the United States or 

(2) the nature, scope, size, scale, 

concentration, interconnectedness, or 

mix of the activities of the nonbank 

financial company could pose a threat 

to the financial stability of the United 

States. The Council has issued a 

procedural rule and interpretive 

guidance regarding its process for 

considering a nonbank financial 

company for potential designation 

under section 113.16 The Dodd-Frank 

Act requires the Council to consider 10 

specific considerations, such as the 

company’s leverage, relationships with 

other significant financial companies, 

and existing regulation by primary 

financial regulatory agencies, when 

determining whether a nonbank 

financial company satisfies either of the 

determination standards.17 Due to the 

unique threat that each nonbank 

financial company could pose to U.S. 

financial stability and the nature of the 

inquiry required by the statutory 

considerations set forth in section 113, 

the Council expects that its evaluations 

of nonbank financial companies under 

section 113 will be firm-specific and 

may include an assessment of 

quantitative and qualitative information 

that the Council deems relevant to a 

particular nonbank financial company. 

The factors described above are not 

exhaustive and may not apply to all 

nonbank financial companies under 

evaluation. 

Payment, clearing, and settlement 

activity designations. The Council also 

has authority to designate certain 

payment, clearing, and settlement (PCS) 

activities ‘‘that the Council determines 

are, or are likely to become, systemically 

important’’ under Title VIII of the DoddFrank Act. PCS activities are defined as 

activities carried out by financial 

institutions to facilitate the completion 

of financial transactions such as funds 

transfers, securities contracts, futures, 

forwards, repurchase agreements, 

swaps, foreign exchange contracts, and 

financial derivatives. Under the DoddFrank Act, PCS activities may include 

(1) the calculation and communication 

of unsettled financial transactions 

between counterparties; (2) the netting 

of transactions; (3) provision and 

maintenance of trade, contract, or 

instrument information; (4) the 

management of risks and activities 

associated with continuing financial 

transactions; (5) transmittal and storage 

of payment instructions; (6) the 

movement of funds; (7) the final 

settlement of financial transactions; and 

(8) other similar functions that the 

Council may determine.18 Before 

designating a PCS activity, the Council 

must consult with certain regulatory 

agencies and must provide financial 

institutions with advanced notice of the 

proposed designation by Federal 

Register publication. A financial 

institution engaged in the PCS activity 

may request an opportunity for a written 

or, at the sole discretion of the Council, 

oral hearing before the Council to 

demonstrate that the proposed 

designation is not supported by 

substantial evidence. The Council may 

waive the notice and hearing 

requirements in certain emergency 

circumstances.19 Following any 

designation of a PCS activity, the 

appropriate federal regulator will 

establish risk-management standards 

governing the conduct of the activity by 

financial institutions.20 The objectives 

and principles for these riskmanagement standards will be to 

promote robust risk management, 

promote safety and soundness, reduce 

systemic risks, and support the stability 

of the broader financial system.21 The 

risk-management standards may address 

areas such as risk management policies 

and procedures, margin and collateral 

requirements, participant or 

counterparty default policies and 

procedures, the ability to complete 

timely clearing and settlement of 

financial transactions, and capital and 

financial resource requirements for 

designated financial market utilities, 

among other things.22

Financial market utility designations. 

In addition, the Council has authority to 

designate financial market utilities 

(FMUs) that it determines are, or are 

likely to become, systemically 

important.23 An FMU is defined as any 

person that manages or operates a 

multilateral system for the purpose of 

transferring, clearing, or settling 

payments, securities, or other financial 

transactions among financial 

institutions or between financial 

institutions and the person.24 The 

Council has issued a procedural rule 

regarding its authority to designate 

FMUs.25 In determining whether 

designation of a given FMU is 

warranted, the Council must consider 

(1) the aggregate monetary value of 

transactions processed by the FMU; (2) 

the FMU’s aggregate exposure to its 

counterparties; (3) the relationship, 

interdependencies, or other interactions 

of the FMU with other FMUs or with 

PCS activities; (4) the effect of the 

FMU’s failure or disruption on critical 

markets, financial institutions, or the 

broader financial system; and (5) any 

other factors that the Council deems 

appropriate.26 Once designated as an 

FMU, the FMU is subject to the 

supervisory framework of Title VIII of 

the Dodd-Frank Act. Section 

805(a)(1)(A) requires the Federal 

Reserve Board to prescribe riskmanagement standards governing the 

FMU’s operations related to its PCS 

activities unless the FMU is a 

derivatives clearing organization or 

clearing agency.27 Specifically, section 

805(a)(2) grants the Commodity Futures 

Trading Commission or the Securities 

and Exchange Commission, 

respectively, the authority to prescribe 

such risk-management standards for a 

designated FMU that is either a 

derivatives clearing organization 

registered under section 5b of the 

Commodity Exchange Act or a clearing 

agency registered under section 17A of 

the Securities Act of 1934.28 Such 

standards are intended to promote 

robust risk management, promote safety 

and soundness, reduce systemic risks, 

and support the stability of the broader 

financial system. In addition, the 

Federal Reserve Board may authorize a 

Federal Reserve Bank to establish and 

maintain an account for a designated 

FMU or provide the designated FMU 

with access, in unusual or exigent 

circumstances, to the discount 

window.29 A designated FMU is subject 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 88, No. 82 / Friday, April 28, 2023 / Notices 26311 

30 Dodd-Frank Act section 807, 12 U.S.C. 5466. 

to annual examinations by the relevant 

federal supervisory agency.30

Kayla Arslanian, 

Executive Secretary. 

[FR Doc. 2023–08969 Filed 4–27–23; 8:45 am] 

BILLING CODE 4810–AK–P–P 

GENERAL SERVICES 

ADMINISTRATION 

[Notice-MG–2023–01; Docket No. 2023– 

0002; Sequence No. 14] 

Office of Federal High-Performance 

Green Buildings; Green Building 

Advisory Committee; Notification of 

Upcoming Public Meetings 

AGENCY: Office of Government-wide 

Policy, General Services Administration 

(GSA). 

ACTION: Meeting notice. 

SUMMARY: In accordance with the 

requirements of the Federal Advisory 

Committee Act, this notice provides the 

agenda for an in-person and Web-based 

(hybrid) meeting of the Green Building 

Advisory Committee (the Committee) 

and a series of Web-based meetings of 

the Committee’s new Green Leasing 

Task Group (the Task Group). The inperson meeting is open to the public 

and the site is accessible to individuals 

with disabilities. All meetings are open 

for the public to observe; online 

attendees are required, and in-person 

attendees are encouraged to register in 

advance to attend as instructed below. 

DATES: The Committee’s hybrid meeting 

will be held Wednesday, May 10, 2023, 

online and in-person from 10:00 a.m.– 

12:30 p.m., Central Time (11:00 a.m.– 

1:30 p.m., Eastern Time) at the 

Minneapolis Marriott City Center, 30 

South 7th Street Minneapolis, 

Minnesota, USA, 55402. In addition, the 

Committee’s Green Leasing Task Group 

will hold a series of Web-based 

meetings on alternate Thursdays from 

May 18, 2023, through December 14, 

2023, from 3:00 p.m. to 4:00 p.m., 

Eastern Time (ET). 

FOR FURTHER INFORMATION CONTACT: Dr. 

Ken Sandler, Designated Federal 

Officer, Office of Federal HighPerformance Green Buildings, Office of 

Government-wide Policy, GSA, 1800 F 

Street NW, (Mail-code: MG), 

Washington, DC 20405, at 202–219– 

1121, or at gbac@gsa.gov. Additional 

information about the Committee, 

including meeting materials and 

agendas, will be made available on-line 

at http://www.gsa.gov/gbac. 

SUPPLEMENTARY INFORMATION: 

Procedures for Attendance and Public 

Comment 

To obtain information on observing 

any or all of these meetings, please 

follow the instructions on the 

Committee website at: https://

www.gsa.gov/governmentwideinitiatives/federal-highperformancegreen-buildings/policy/green-buildingadvisory-committee/advisorycommittee-meetings. Registrants will be 

asked to provide your full name, 

organization and email address, which 

meetings you would like to observe, 

and, for the hybrid May 10, 2023 

meeting, whether you plan to attend inperson or online, and whether you 

would like to provide public comment. 

Requests to observe the May 10, 2023 

meeting virtually must be received by 

5:00 p.m. ET, on Wednesday, May 3, 

2023 in order to receive the meeting 

information. Registration for in-person 

attendance is highly encouraged. 

Requests to observe the full series of 

Task Group meetings must be received 

by 5:00 p.m. ET, on Monday, May 15, 

2023. After that time, requests to 

observe ongoing Task Group meetings 

must be received by 5:00 p.m. ET on the 

Monday before the meeting in question. 

Since Task Group meetings are 

conducted as a series, it will be most 

useful to observe all or most of them 

from the start. 

For all online meetings, Web meeting 

attendance information will be provided 

following registration. Time will be 

provided at all meetings for public 

comment wherever possible. 

GSA will be unable to provide 

technical assistance to any listener 

experiencing technical difficulties. 

Testing access to the Web meeting site 

before the calls is recommended. To 

request an accommodation, such as 

closed captioning, or to ask about 

accessibility, please contact Dr. Sandler 

at gbac@gsa.gov at least 10 business 

days prior to the meeting to give GSA 

as much time as possible to process the 

request. 

Background 

The Administrator of GSA established 

the Committee on June 20, 2011 

(Federal Register/Vol. 76, No. 118) 

pursuant to Section 494 of the Energy 

Independence and Security Act of 2007 

(EISA, 42 U.S.C. 17123). Under this 

authority, the Committee provides 

independent policy advice and 

recommendations to GSA to advance 

federal building innovations in 

planning, design, and operations to 

reduce costs, enable agency missions, 

enhance human health and 

performance, and minimize 

environmental impacts. 

May 10, 2023 Meeting Agenda 

• Introductions 

• GSA Updates 

• Federal Building Decarbonization 

Task Group Update 

• Federal Green Leasing: 

Æ The Challenge and Proposed Plans 

Æ Public Discussion: How to Engage the 

Commercial Building Market? 

• Additional Public Comment and 

Closing Comments 

Green Leasing Task Group 

The Green Leasing Task Group will 

explore and recommend approaches to 

help GSA meet federal requirements for 

net zero greenhouse gas emissions in its 

leasing of space in privately-owned 

commercial buildings for federal use. 

The purpose of these Web-based 

meetings is for the Task Group to 

develop consensus recommendations 

for submission to the full Committee. 

The Committee will, in turn, deliberate 

on the Task Group recommendations 

and decide whether to proceed with 

formal advice to GSA based upon them. 

Kevin Kampschroer, 

Federal Director, Office of Federal HighPerformance Green Buildings, General 

Services Administration. 

[FR Doc. 2023–08769 Filed 4–27–23; 8:45 am] 

BILLING CODE 6820–14–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

[Document Identifiers: CMS–10316, CMS– 

10260, CMS–367a–e, and CMS–10243] 

Agency Information Collection 

Activities: Submission for OMB 

Review; Comment Request 

AGENCY: Centers for Medicare & 

Medicaid Services, Health and Human 

Services (HHS). 

ACTION: Notice. 

SUMMARY: The Centers for Medicare & 

Medicaid Services (CMS) is announcing 

an opportunity for the public to 

comment on CMS’ intention to collect 

information from the public. Under the 

Paperwork Reduction Act of 1995 

(PRA), federal agencies are required to 

publish notice in the Federal Register 

concerning each proposed collection of 

information, including each proposed 

extension or reinstatement of an existing 

collection of information, and to allow 

a second opportunity for public 


ddrumheller on DSK120RN23PROD with NOTICES1