Financial Stability Oversight Council

Program Summary by Budget Activity

Summary

Prior to the 2008 financial crisis, the existing 

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 

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 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.

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.

Over the last year, the Council has continued 

to make progress in fulfilling its mandate. It 

has issued a final rule and guidance relating 

to the designation of nonbank financial 

companies for Federal Reserve supervision 

and enhanced prudential standards, and has 

finalized the designation of an initial set of 

eight systemically important financial 

market utilities that will be subject to 

enhanced risk-management standards. The 

Council also continued to monitor potential 

risks to U.S. financial stability; fulfilled 

explicit statutory requirements, including the 

completion of three reports; and served as a 

forum for discussion and coordination 

among the member agencies implementing 

the Act.

Over the next year, the Council will be: 

considering whether to designate certain 

nonbank financial companies to be subject 

to supervision by the Federal Reserve and 

enhanced prudential standards; considering 

whether to designate financial market 

utilities (FMUs) as systemically important; 

Dollars in Thosands

FY 2012 FY 2013 FY 2014

Actual Estimated Estimated Change % Change

FSOC Secretariat $5,428 $8,883 $8,729 $3,301 60.81%

FDIC Payment $4,716 $6,653 $10,700 $5,984 126.89%

Total Cost of Operations $10,144 $15,536 $19,429 $9,285 91.53%

FTE 16 26 29 13 81.25%

FY 2012 to FY 2014
developing and evaluating tools for 

monitoring the financial system for 

emerging risks; and facilitating interagency 

cooperation to identify and analyze potential 

emerging threats. The financial reforms in 

the 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 (as 

with the subprime crisis of 2007), outside it 

(for instance in the event of an oil price 

shock), or a combination of the two (as is 

the case with the problems in the euro area). 

Regulators are making progress in 

implementing the 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 coordination and information 

sharing with respect to various regulatory 

initiatives. 

The Council is required by the Act to 

convene no less than quarterly, but the 

Council has historically 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—in 2012, the 

Council met 12 times. The Council will 

continue to remain focused on both 

identifying near-term threats and addressing 

structural vulnerabilities in the financial 

system. Transparency on 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.

FSOC FY 2014 Budget Highlights

Dollars in Thousands

Financial Stability Oversight 

Council FTE Amount

FY 2012 Actual 16 $10,144 

FY 2013 Estimated Budget 26 $15,536 

Changes to Base:

Other Adjustments $4,409 

Hiring Plan Adjustment 3 $362 

FDIC Payment Adjustment $4,047 

Subtotal FY 2013 Changes to Base 3 $4,409 

Total FY 2014 Base 29 $19,945 

Other Program Changes 0 ($516)

Support Adjustment 0 ($516)

Total FY 2014 Estimated Budget 29 $19,429

*Includes FDIC reimbursement

*The adjustment includes the impacts of inflation and the 

proposed one percent pay increase

Explanation of Budget Activities 

FSOC Secretariat ($8,729,000 from 

assessments)

The Council has a clear statutory mandate to 

facilitate coordination among financial 

regulators and identify risks and respond to 

emerging threats to financial stability. FSOC 

has ten voting members, including the 

Secretary of the Treasury who serves as 

Chairman, the heads of eight federal 

financial regulatory agencies, an 

independent member with insurance 

expertise, and five non-voting members. The 

Council is not a bureau or office of the 

Department of the Treasury. However, 

under the Act the Council’s administrative 

expenses are considered expenses of the 

Office of Financial Research, an office 

within the Department of the Treasury. 

FDIC Payments ($10,700,000 from 

assessments) 

Section 210(n)(10) of the Act provides that 

certain reasonable implementation expenses 

of the FDIC incurred after the date of 

enactment of the 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 

rulewriting and resolution planning 

consistent with the FDIC's implementation 

of its responsibilities under Title II of the 

Act.

Legislative Proposals 

There are no current proposals for amending 

the authorizing legislation. 

Description of Performance 

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.