Financial Stability Oversight
 

Council
 

FY 2015 

President’s Budget
 
 

 

 

 

 

 

 

Table of Contents
 Section 1 – Purpose........................................................................................................................3

1.1 Resource Detail Table ...........................................................................................................4

1B –Vision, Priorities and Context..............................................................................................4

Section 2 – Budget Adjustments Table ........................................................................................6

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

2B – Appropriations Language and Explanation of Changes .....................................................6

2C – Legislative Proposals ..........................................................................................................6

2.2— Resources Summary by Budget Activity ..........................................................................7

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

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

3.1.1 - Financial Stability Oversight Council Budget and Performance Report and Plan ..........8

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

3.1.2 - FDIC Payment Budget and Performance Report and Plan ..............................................8
 

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Section 1 – Purpose 

1A – Mission Statement 

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 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 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. 

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Dollars in thousands 

Financial Stability Oversight Council FY 2013 FY 2014 FY 2015 Change % Change 

Budgetary Resources Actual Estimated Estimated FY 2014 to FY 

2015 

FY 2014 to FY 

2015 

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT 

Revenue/Offsetting Collections: 

Assessments 16,000 21,733 20,899 (834) -4% 

Interest 1 5 5 0 0% 

Restoration of sequestration reduction 0 816 0 (816) -100% 

Recoveries 291 0 0 0 0% 

Unobligated Balances from Prior YearsA 11,303 14,773 16,490 1,717 12% 

Total Revenue/Offsetting Collections 27,595 37,328 37,394 67 0% 

Other Resources: 

FSOC Secretariat 23 5,679 25 7,673 26 7,872 1 200 4% 3%
 

FDIC Payment 6,327 11,600 12,500 900 8%
 

Total Expenses/Obligations 23 12,006 25 19,273 26 20,372 1 1,100 4% 6% 

Sequestration Reduction	 (816) (1,565) 0 1,565 -100% 

Net Results 14,773 16,490 17,022 532 3% 

a

The FY 2015 unobligated!balance brought forward!total differs from the President’s Budget Appendix due to!the restoration!of sequestered!funds

from FY 2013 collections that!were not!included in the Appendix calculation.

 

•	 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. 

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 Office of Financial Research, 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 

rulewriting and resolution planning consistent with the FDIC's implementation of its responsibilities 

under Title II of the Dodd-Frank Act. 

1.1 Appropriations Detail Table 

1B –Vision, Priorities and Context 

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. 

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

final determinations that three nonbank financial companies will be subject to Federal Reserve 

supervision and enhanced prudential standards. The Council continued to monitor the eight 

financial market utilities (FMUs) that were designated as systemically important by the Council in 

2012. In November 2012, the Council issued for public comment proposed recommendations 

regarding reforms to money market mutual funds that would improve the stability of the industry 

and reduce these funds’ susceptibility to runs. 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 (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 was the case with the problems in the Euro area). 

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 i required by$the$Dodd4Frank 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$near4term$threats and addressing structural vulnerabilities in the financial system.

Transparency$into$Council decisions will be$provided$through$an$annual report to$Congres

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

financial stability.

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Dollars in Thousands 

Financial Stability Oversight Council1 FTE Amount 

FY 2014 Estimated Budget 25 $19,273 

Changes to Base: 

Other Adjustments 1 $1,100 

Hiring Plan Adjustment 1 $200 

FDIC Payment Adjustment $900 

Total FY 2015 Base 26 $20,372 

Total FY 2015 Estimated Budget 26 $20,372 

1

Includes FDIC reimbursements 

 

 

 

 

 

 

 

Section 2 – Budget Adjustments Table 

2.1—Budget Adjustments Table 

2A – Budget Increases and Decreases Description 

Other Adjustments ........................................................................................ +$1,100,000 

Hiring Plan Adjustment +$200,000/+1FTE 

Adjustment for Hiring Plan. 

FDIC Payment Adjusment +$900,000/+0 FTE 

Adjustment to reflect remaining anticipated ramp-up of activities performed by the FDIC that are 

eligible for reimbursement. 

2B – Appropriations Language and Explanation of Changes 

The Financial Research Fund receives no appropriations from Congress. 

2C – Legislative Proposals 

The Financial Research Fund has no legislative proposals. 

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Dollars in Thousands 

Financial Stability Oversight Council FY 2013 FY 2014 FY 2015 

Object Classification1 Actual Estimated Estimated 

11 Full-time permanent 2,954 2,813 2,969 

12 Personnel benefits 744 823 867 

Total Personnel and Benefits Compensation 3,697 3,636 3,836 

21 Travel and transportation of persons 40 105 105 

22 Transportation of Things 5 0 0 

23.1 Rental payments to GSA	 123 150 150 

23.3	 Communication, utilities, and misc charges 21 50 50 

24 Printing and reproduction 40 35 35 

25.1 Advisory and Assistance Services	 520 825 825 

25.2 Other Services from Non-Federal Sources	 20 67 67 

25.3	 Other Goods and Services from Federal Sources 7,299 13,870 14,770 

26 Supplies and materials 232 490 490 

31 Equipment 11 45 45 

Total Non-Personnel 8,309 15,637 16,537 

Total Budgetary Resources $12,006 $19,273 $20,372 

Budget Activities: 

Financial Stability Oversight Council 5,679 7,673 7,872 

FDIC Payment 6,327 11,600 12,500 

Total Budgetary Resources $12,006 $19,273 $20,372 

FTE 23 25 26 

1 Includes FDIC reimbursements 

2.2— Resources Summary by Budget Activity 

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Dollars in Thousands 

Financial Stability Oversight Council 

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 

Actual Actual Actual Actual Estimated Estimated 

Expenses/Obligations $0 $2,921 $5,428 $5,679 $7,673 $7,872 

Budget Activity Total $0 $2,921 $5,428 $5,679 $7,673 $7,872 

 

 

 

 

 

 

 

Dollars in Thousands 

FDIC Payment 

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 

Actual Actual Actual Actual Estimated Estimated 

Expenses/Obligations $0 $0 $4,716 $6,327 $11,600 $12,500 

Budget Activity Total $0 $0 $4,716 $6,327 $11,600 $12,500 

Section 3 – Budget and Performance Plan Report 

3A – Financial Stability Oversight Council 

($7,872,000 from assessments): 

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

identify risks and respond to emerging threats to U.S. financial stability. The Council is chaired by 

the Secretary of the Treasury and consists of ten voting members, including the heads of eight 

federal financial regulatory agencies and an independent member with insurance expertise, and five 

non-voting members. The Council is an executive agency of the Federal Government and is not a 

bureau or office of the Department of the Treasury. 

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 Report and Plan 

3B – Federal Deposit Insurance Corporation Payments 

(12,500,000 from assessments): 

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 

rulewriting and resolution planning consistent with the FDIC's implementation of its responsibilities 

under Title II of the Dodd-Frank Act. 

3.1.2 - FDIC Payment Budget and Performance Report and Plan 

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