Financial Stability Oversight 

Council

FY 2016

President’s Budget

February 2, 2015
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Table of Contents

Section 1 – Purpose ....................................................................................................................... 3

1A – Mission Statement.............................................................................................................. 3

1.1 – Resource Detail Table........................................................................................................ 3

1B – Vision, Priorities and Context............................................................................................ 3

Section 2 – Budget Adjustments and Appropriation Language............................................... 6

2.1 – Budget Adjustments Table................................................................................................. 6

2A – Budget Increases and Decreases Description..................................................................... 6

2.2 – Operating Levels Table...................................................................................................... 7

2B – Appropriations Language and Explanation of Changes..................................................... 7

2C – Legislative Proposals.......................................................................................................... 7

Section 3 – Budget and Performance Plan ................................................................................. 8

3A – Financial Stability Oversight Council................................................................................ 8

3.1.1 – Financial Stability Oversight Council Budget and Performance Plan............................ 8

3B – Federal Deposit Insurance Corporation Payments............................................................. 8

3.1.2 – Federal Deposit Insurance Corporation Payments Budget and Performance Plan......... 8
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Section 1 – Purpose

1A – Mission Statement

To identify risks to the financial stability of the United States, to promote market discipline, and 

to respond to emerging threats to the stability of the U.S. financial system.

1.1 – Resource Detail Table

Dollars in Thousands

Financial Stability Oversight Council FY 2014 FY 2015 FY 2016 FY 2015 to FY 2016

Budgetary Resources Actual Estimated Estimated $ Change % Change

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Revenue/Offsetting Collections

Assessments 0 18,527 0 18,831 0 19,641 0 810 .00 4.30%

Interest 0 6 0 5 0 6 0 1 .00 20.00%

Restoration of Sequestration Rescission 0 821 0 974 0 1,375 0 401 .00 41.17%

Recovery from Prior Years 0 419 0 210 0 263 0 53 .00 25.24%

Unobligated Balances from Prior Years 0 14,757 0 9,304 0 11,631 0 2,328 .00 25.01%

Total Revenue/Offsetting Collections 0 29,530 0 29,324 0 32,916 0 3,592 .00 12.25%

Expenses/Obligations

Financial Stability Oversight Council 23 7,660 27 8,690 31 9,816 4 1,126 14.81% 12.96%

Federal Deposit Insurance Corporation 

Payments 0 11,592 0 7,628 0 9,500 0 1,872 N/A 24.54%

Total Expenses/Obligations 23 19,252 27 16,318 31 19,316 4 2,998 14.81% 18.37%

Rescissions/Cancellations

Sequestration Rescission 0 (974) 0 (1,375) 0 0 0 1,375 .00 -100.00%

Total Rescissions/Cancellations 0 (974) 0 (1,358) 0 0 0 1,358 .00 -100.00%

Net Results 0 9,304 0 11,631 0 13,600 0 1,969 .00 16.76% 1 FY 2014 Actual includes $1.5M returned to the Board of Governors of the Federal Reserve System for reimbursement of 

unobligated interim funding transfers made prior to July 20, 2012, pursuant to Section 155(c) of the Dodd-Frank Act. Expenses 

recorded in Object Class 25 - Contractual Services.

1B – Vision, Priorities and Context

Prior to the 2008 financial crisis, the existing financial regulatory framework focused narrowly 

on individual institutions and markets, which allowed supervisory gaps to grow and regulatory 

inconsistencies to emerge – in turn, allowing arbitrage and weakened standards. The Dodd-Frank 

Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) established the 

Financial Stability Oversight Council (Council) with a clear statutory mandate that created for 

the first time collective accountability for identifying and responding to emerging threats to 

financial stability. The Council is chaired by the Secretary of the Treasury and consists of ten

voting members and five nonvoting members. The Council brings together the expertise of the 

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

The Council’s three primary purposes under the Dodd-Frank Act are:

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.
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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.

The Council has important new authorities under the Dodd-Frank Act to:

• Collect information across the financial system: The Council has a duty to collect 

information across the financial system and to direct the Office of Financial Research (OFR)

to collect additional information if necessary to assess risks to the financial system. The 

collection and analysis of that information aids the Council and OFR in their shared goal of 

filling gaps in our knowledge so that regulators will be better equipped to identify risks and 

emerging threats across the financial system.

• Designate nonbank financial companies for consolidated supervision: Before the financial 

crisis, some of the firms which posed the greatest risk to the financial system were not 

subject to adequate consolidated supervision. The Dodd-Frank Act gives the Council the 

authority to require consolidated supervision of nonbank financial companies, regardless of 

their corporate form.

• Designate financial market utilities and payment, clearing, or settlement activities as 

systemically important: The Dodd-Frank Act authorizes the Council to designate certain 

financial market utilities and payment, clearing, or settlement activities as systemically 

important, requiring them to meet prescribed risk management standards and submit to 

heightened oversight by the Federal Reserve, the Securities and Exchange Commission, or 

the Commodity Futures Trading Commission.

• Recommend stricter standards: The Council has the authority to recommend stricter 

standards for large, interconnected bank holding companies and nonbank financial 

companies designated by the Council for consolidated supervision. Moreover, if the Council

determines that certain financial practices or activities create risks for U.S. financial markets, 

the Council may make recommendations to the relevant primary financial regulatory 

agencies to apply new or heightened standards and safeguards.

• Limit the activities of firms that pose a “grave threat” to financial stability: The Council has a 

significant role in determining whether action should be taken to break up a firm that poses a 

“grave threat” to the financial stability of the United States.

• Facilitate regulatory coordination: The Council has a statutory duty to facilitate information 

sharing and coordination among the member agencies regarding domestic financial services 

policy development, rulemaking, examinations, reporting requirements, and enforcement 

actions. Through this role, the Council helps eliminate gaps and weaknesses within the 

regulatory structure, to promote a safer and more stable financial system.

Over the last year, the Council has continued to make progress in fulfilling its mandate. It 

continued to evaluate whether to designate certain nonbank financial companies for Federal 

Reserve supervision and enhanced prudential standards, and conducted annual reviews for each 

of the three companies designated in 2013. The Council continued to monitor the eight financial 
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market utilities (FMUs) that were designated as systemically important by the Council in 2012. 

The Council also continued to identify and monitor potential risks to U.S. financial stability; 

fulfilled explicit statutory requirements, including the completion of its third annual report to 

Congress; and served as a forum for discussion and coordination among the member agencies 

implementing the Dodd-Frank Act.

Over the next year, the Council will continue to evaluate nonbank financial companies for 

potential designation for Federal Reserve supervision and enhanced prudential standards; 

consider whether to designate additional FMUs as systemically important; monitor the financial 

system for emerging risks; and facilitate interagency cooperation to identify and analyze 

potential emerging threats. The financial reforms in the Dodd-Frank Act are designed to create a 

more resilient financial system that is better able to absorb a wide range of shocks, whether they 

originate within the financial system, outside it, or a combination of the two. Regulators are 

making progress in implementing the Dodd-Frank Act in a consistent and coordinated manner, 

and the reform effort has proceeded along four broad dimensions: strengthening the safety and 

soundness of core financial institutions; making financial markets more resilient and transparent; 

implementing new authorities to resolve large, complex financial institutions; and enhancing 

investor and consumer protections. The Council will continue to facilitate interagency 

coordination and information sharing with respect to various regulatory initiatives. 

The Council is required by the Dodd-Frank Act to convene no less than quarterly, but in practice 

the Council has convened on a more frequent basis to share information on key financial 

developments, coordinate on regulatory implementation, and monitor progress on 

recommendations from the Council’s annual reports. The Council will continue to remain

focused on both identifying near-term threats and addressing structural vulnerabilities in the 

financial system. Transparency into Council decisions will be provided through an annual report 

to Congress and the public and testimony by the Chairperson on Council activities and emerging 

threats to financial stability.

The Council is an executive agency of government and is not an office or bureau of the 

Department of the Treasury. However, under the Dodd-Frank Act the Council’s expenses are 

considered expenses of the OFR, an office within the Department of the Treasury.

Federal Deposit Insurance Corporation Payments

Section 210(n)(10) of the Dodd-Frank Act provides that certain reasonable implementation 

expenses of the FDIC incurred after the enactment of the Dodd-Frank Act shall be treated as 

expenses of the Council. The FDIC must periodically submit requests for reimbursement for 

implementation expenses to the Chairperson of the Council, who shall arrange for prompt 

reimbursement to the FDIC of reasonable implementation expenses. The expenses estimated are 

for rule writing and resolution planning consistent with the FDIC's implementation of its 

responsibilities under Title II of the Dodd-Frank Act.

The Council’s activities support the Treasury Department’s FY 2014-2017 Strategic Plan 

Goal 1: Promote domestic economic growth and stability while continuing reforms of the 

financial system. Within Goal 1 it supports- 

• Objective 1.3: Complete implementation of financial regulatory reform initiatives and 

continue monitoring the markets for threats to stability.
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Section 2 – Budget Adjustments and Appropriation Language

2.1 – Budget Adjustments Table

Dollars in Thousands

Financial Stability Oversight Council FTE Amount

FY 2015 Estimated 27 $16,318

Total FY 2016 Base 28 $16,318

Program Changes:

Program Increases: 4 $2,998

Hiring Plan Adjustment 4 $618

Support Adjustment - $508

FDIC Payment Adjustment - $1,872

Total FY 2016 Estimated 32 $19,316

2A – Budget Increases and Decreases Description

Program Increases ....................................................................................+$2,998,000 / +4 FTE

Hiring Plan Adjustment +$618,000 / +4 FTE 

Five additional on-boards will be brought on in both FY 2015 and FY 2016. Steady state of 36 

on-boards should be achieved by the end of FY 2016.

Support Adjustment +$508,000 / +0 FTE 

The Adjustment reflects anticipated increases in support activities for standard operations and 

increase of FTE.

FDIC Payment Adjustment +$1,872,000 / +0 FTE 

The Adjustment reflects anticipated activities performed by the FDIC that are eligible for 

reimbursement.
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2.2 – Operating Levels Table

Dollars in Thousands

Financial Stability Oversight Council FY 2014 FY 2015 FY 2016

Object Classification Actual Estimated Estimated

11.1 - Full-time permanent 2,973 3,403 4,131

11.9 - Personnel Compensation (Total) 2,973 3,403 4,131

12.0 - Personnel benefits 778 1,138 1,392

Total Personnel and Compensation Benefits $3,751 $4,541 $5,523

21.0 - Travel and transportation of persons 12 130 130

23.1 - Rental payments to GSA 123 150 150

23.3 - Communication, utilities, and misc charges 27 19 20

24.0 - Printing and reproduction 14 14 15

25.1 - Advisory and assistance services 319 300 325

25.3 - Other purchases of goods & serv frm Govt accounts 14,754 10,602 12,600

26.0 - Supplies and materials 235 480 480

31.0 - Equipment 17 82 73

Total Non-Personnel 15,501 11,777 13,793

Total Budgetary Resources $19,252 $16,318 $19,316

Budget Activities:

Financial Stability Oversight Council 7,660 8,690 9,816

Federal Deposit Insurance Corporation Payments 11,592 7,628 9,500

Total Budgetary Resources $19,252 $16,318 $19,316

FTE 23 27 31 1 Includes FDIC Reimbursement 2 FY 2014 Actual includes $1.5M returned to the Board of Governors of the Federal Reserve System for reimbursement of

unobligated interim funding transfers made prior to July 20, 2012, pursuant to Section 155(c) of the Dodd-Frank Act.

2B – Appropriations Language and Explanation of Changes

The FSOC receives no appropriations from Congress.

2C – Legislative Proposals

The FSOC has no legislative proposals.
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Section 3 – Budget and Performance Plan

3A – Financial Stability Oversight Council

($9,816,000 from expenses/obligations): 

The Council has a clear statutory mandate to facilitate coordination among financial regulators 

and identify risks and respond to emerging threats to U.S. financial stability. 

There are no measures specified for managing Council performance at this time. Information on 

the Council is provided on www.treasury.gov, www.fsoc.gov, and member agency websites to 

provide transparency and accountability.

3.1.1 – Financial Stability Oversight Council Budget and Performance Plan

Dollars in Thousands

Financial Stability Oversight Council Budget Activity

Resource Level FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $2,921 $5,428 $5,628 $7,660 $8,690 $9,816

Budget Activity Total $2,921 $5,428 $5,628 $7,660 $8,690 $9,816 1 FY 2014 Actual includes $1.5M returned to the Board of Governors of the Federal Reserve System for reimbursement of 

unobligated interim funding transfers made prior to July 20, 2012, pursuant to Section 155(c) of the Dodd-Frank Act. Expenses 

recorded in Object Class 25 - Contractual Services.

3B – Federal Deposit Insurance Corporation Payments

($9,500,000 from expenses/obligations): 

Section 210(n)(10) of the Dodd-Frank Act provides that certain reasonable implementation 

expenses of the FDIC incurred after the enactment of the Dodd-Frank Act shall be treated as 

expenses of the Council. The FDIC must periodically submit requests for reimbursement for 

implementation expenses to the Chairperson of the Council, who shall arrange for prompt 

reimbursement to the FDIC of reasonable implementation expenses. The expenses estimated are 

for rule writing and resolution planning consistent with the FDIC's implementation of its 

responsibilities under Title II of the Dodd-Frank Act. 

3.1.2 – Federal Deposit Insurance Corporation Payments Budget and Performance Plan

Dollars in Thousands

Federal Deposit Insurance Corporation Payments Budget Activity

Resource Level FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $0 $4,716 $6,327 $11,592 $7,628 $9,500

Budget Activity Total $0 $4,716 $6,327 $11,592 $7,628 $9,500