Office of Financial Research

FY 2016

President’s Budget

February 2, 2015
OFR - 2

Table of Contents

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

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

Resource Detail Table................................................................................................................. 3

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

Section 2 – Budget Adjustments and Appropriation Language............................................. 14

2.1 – Budget Adjustments Table............................................................................................... 14

2A – Budget Increases and Decreases Description................................................................... 14

2.2 – Operating Levels Table.................................................................................................... 15

2B – Appropriations Language and Explanation of Changes................................................... 15

2C – Legislative Proposals........................................................................................................ 15

Section 3 – Budget and Performance Plan ............................................................................... 16

3A – Data Center ...................................................................................................................... 16

3.1.1 – Data Center Budget and Performance Plan .................................................................. 17

3B – Research and Analysis ..................................................................................................... 17

3.1.2 – Research and Analysis Budget and Performance Plan ................................................. 18

3C – Operations and Support Services ..................................................................................... 18

3.1.3 – Operations and Support Services Budget and Performance Plan ................................. 19
OFR - 3

Section 1 – Purpose 

1A – Mission Statement

Promote financial stability by delivering high-quality financial data, standards, and analysis for 

the Council and the public.

Resource Detail Table

Dollars in Thousands

Office of Financial Research 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 A 92,693 105,170 103,578 (1,592) (.2%)

 Unobligated Balances from Prior Years 67,226 73,015 78,956 5,941 8%

 Recoveries 2,040 1,290 1,488 198 15%

 Interest 29 33 34 1 4%

 Offsetting Collections 5 0 0 0 N/A

 Restoration of Sequestration Rescission 964 6,676 7,680 1,004 15%

Total Revenue/Offsetting Collections 162,957 186,184 191,736 5,552 3%

Other Resources:

Data Center 90 46,940 117 57,991 137 64,034 20 6,043 17% 10%

Research Center B 33 7,700 58 14,578 68 16,108 10 1,530 17% 10%

Operations and Support Services C 43 28,626 55 26,979 65 27,963 10 984 18% 4%

Total Expenses/Obligations 166 83,266 230 99,548 270 108,105 40 8,557 17% 9%

Sequestration Reduction 

(6,676)

 

(7,680) 0 7,680 N/A

Net Results 73,015 78,956 83,631 4,675 6%

a The OFR is financed through assessments on certain financial companies (see Assessments in Section 3). b “Research and Analysis” includes only staffing, outside work arrangements, and contracting related to annual report production

Costs associated with data, information systems, and analytical tools are captured under “Data Center.” 

c “Operations and Support Services” includes two offices formerly located in the Data Center. FTEs and estimated budget 

amounts reflect that organizational change.

1B – Vision, Priorities, and Context 

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act)

established the Office of Financial Research (OFR or Office) within the Department of the 

Treasury (Treasury). The OFR seeks to promote financial stability by delivering high-quality 

financial data, standards, and analysis for the Financial Stability Oversight Council (FSOC) and 

the public.

The OFR has established three goals that reflect its primary responsibilities — data and analysis, 

data standardization, and research — under the Dodd-Frank Wall Street Reform and Consumer 

Protection Act.1

 1 See the OFR’s strategic plan for FY 2015-2019
OFR - 4

1. The OFR is an essential source of data and analysis for monitoring threats to financial 

stability.

Key objectives of this goal include:

• OFR’s monitoring tools and analysis are widely used and critical to assessing financial 

stability.

• Data used to monitor financial stability are comprehensive, reliable, and accessible to 

policy makers and the public through the OFR.

• Data providers and the public trust that OFR data are protected are secure.

2. Standards that improve the quality and usefulness of financial data are identified and 

adopted.

Key objectives of this goal include:

• Recognition of the need for standards by policy makers and industry.

• The OFR is the source of expert knowledge needed to develop and implement types and 

formats of data reported and collected.

• Financial data standards that create efficiencies and facilitate analysis are widely used.

3. Leading edge research improves financial stability monitoring and the scope and 

quality of financial data, and informs policy and risk management.

Key objectives of this goal include:

• The OFR is the recognized center for objective, innovative research on financial 

stability.

• OFR research is widely cited and used in policymaking, risk management, and data 

management.

Progress Against Mission

The OFR has made significant progress toward its mission, as the following examples show: 

1. Analyzing Threats to Financial Stability

The OFR has a mandate to assess risks to the financial stability of the United States and to 

monitor, investigate, and report to Congress and the Council on changes in those risks. 

Financial stability occurs when the financial system, even under stress, operates sufficiently 

to provide its six basic functions for the economy — credit allocation and leverage, maturity 

transformation, risk transfer, price discovery, liquidity provision, and facilitation of 

payments. To fulfill this mandate, OFR reports regularly to the Council on developments in 

the financial system as well as conduct longer-term research on financial stability (see 4).

The OFR has made strong progress on tools and metrics for detecting and measuring 

potential threats to financial stability. The OFR continues to develop its Financial Stability 

Monitor, a framework for assessing financial stability using a wide variety of metrics and 

indicators. The latest reading of the Monitor is contained in OFR 2014 Annual Report. The 

OFR plans to use the Monitor to provide its assessment of U.S. financial stability twice per 

year. In addition, the OFR presents a Financial Markets Monitor each month to the Council

and its Systemic Risk Committee. As part of its monitoring program, the OFR also relies on 
OFR - 5

qualitative risk assessment activities and several internal monitors which use confidential 

data on specific markets. 

In December 2014, the OFR published its 2014 Annual Report per Section 154(d) of the 

Dodd-Frank Act.

2 While the report covers a wide range of financial stability issues, a 

significant portion of the report addresses threats. As the statute requires, this third annual 

report of the Office included the OFR’s analysis of threats to the financial stability of the 

United States, the status of the Office’s work to meet its mission, and key findings of the 

Office’s research on and analysis of the financial system. The Annual Report also

documents the meaningful progress the Office has made in meeting our statutory mandates 

and mission since we published our second annual report in December 2013.

The OFR also provides data for the Council to use to develop its Annual Report on financial 

stability, as well as data and analysis relating to the designation of nonbank financial 

companies for consolidated supervision by the Federal Reserve Board. 

2. Addressing Data Gaps

The OFR identifies data needs through its research and monitoring and close collaboration 

with the Council and its member agencies. To determine if available data exist to meet those 

needs, the Office, in conjunction with the Council’s Data Committee, compiled and 

maintains an inventory describing the data that Council member agencies purchase or collect. 

This inventory is shared with the other FSOC member agencies. The public portion of the 

inventory is also available on the OFR’s public website.

Comparing data needs with this inventory can help identify gaps, avoid duplication, reduce 

costs, minimize regulatory burden, and take advantage of existing data sources to the extent 

possible. To fill the gaps, the Office collaborates across the Council to develop priorities and 

then look to alternative ways to expand the scope of data, such as sharing or improving the 

quality of existing data, promoting data standards, and collecting new data.

 

The OFR has successful data sharing arrangements with a number of Council member 

agencies and is working to establish new ones. For example, the Office is collaborating with 

Federal Reserve staff to improve the quality and scope of data in repo markets. In addition, 

the OFR is considering a request from the Payments Risk Committee (sponsored by the 

Federal Reserve Bank of New York) to collaborate with the FRBNY to collect and analyze 

data on intraday cash flows. 

The OFR leads the Council’s Data Committee. The Data Committee promotes 

improvements in data collection and information sharing among Council members. The Data 

Committee also plays an integral role in the broader initiative to facilitate the secure sharing 

of information by the OFR. For example, the Committee has completed a proposed 

framework for mapping the OFR’s information security categorizations to the ones used by 

 2 http://www.treasury.gov/initiatives/ofr/about/Documents/OFR_AnnualReport2014_FINAL_12-1-2014.pdf
OFR - 6

other Council members, as encouraged by the Council of Inspectors General on Financial 

Oversight.

3

3. Data Standards

The OFR supports the Council and its member agencies by standardizing the types and 

formats of data reported and collected. The Office’s process for promoting data standards 

includes: (1) evaluating whether standards are needed for a particular set of data and whether 

developing them fits the Office’s mission, (2) determining whether the data in question are 

good candidates for standardization, and (3) determining the OFR’s strategy. 

Legal Entity Identifier System

The Office continues to be a leader in the initiative to establish a Legal Entity Identifier 

(LEI), a unique, global standard for identifying parties to financial transactions. Over 

300,000 LEIs have been assigned to companies from over 185 countries, and are being relied 

on for regulatory reporting of swaps and other instruments in North America, Europe, and 

Asia.

The OFR’s Chief Counsel serves as the first chair of the body supervising the standup and 

operation of the system, a 60-member Regulatory Oversight Committee, formed in January 

2013 with the backing of the G20. 

In addition, the Office assists Council member agencies with data standards initiatives. For 

example, the OFR is working with the Commodity Futures Trading Commission and global 

regulators to align and standardize derivatives reporting. Additionally, for the LEI 

integration in the mortgage industry, the Office worked with the Mortgage Industry 

Standards Maintenance Organization (MISMO), a data standards body for the mortgage 

industry, to add the LEI data record to the industry’s standard for data exchange. The Office 

also published a working paper in FY 2014, with collaboration from certain Council member 

agencies, describing the need for and strategy to develop a universal mortgage loan identifier. 

Interagency Working Groups

During FY 2015, the OFR plans to establish additional interagency working groups on key 

issues related to data standards (including assisting Council member agencies with 

derivatives reporting standards) and participate in issue-specific working groups sponsored 

by other organizations (such as work related to mortgage standards sponsored by the

Consumer Financial Protection Bureau). The OFR also plans to produce analysis in 

collaboration with other Council members on related topics, such as derivative product

classification or the need for additional financial data identifiers. 

 3 The Council of Inspector General on Financial Oversight Annual Report can be found at: 

http://www.treasury.gov/about/organizationalstructure/ig/Documents/CIGFO%20Document/508_CIGFO%20Annual%20Report.pdf.
OFR - 7

Annual Workshops

The OFR led the FSOC Data Committee to sponsor an annual regulatory data workshop. In 

FY 2013 and 2014, the OFR facilitated the two-day Regulatory Data Workshop and held a 

separate workshop on the topic of legal entity hierarchies on behalf of the Data Committee.

The OFR expects to continue this role and expand the year-round participation of regulators 

in targeted workshops. In addition, the OFR is working with private sector standard-setting 

bodies both nationally and internationally to understand industry and investor priorities The 

OFR sits on the board of the U.S. representative for financial services to the International 

Organization for Standardization, the ANSI X9D standards group and is also involved in 

other industry coordination activities

4. Conducting and Sponsoring Research Related to Financial Stability and Policy

The Office is required by statute to perform research on risks to financial stability and to 

evaluate attempts to mitigate those risks. Along with its Annual Report and other reports 

sponsored by the office, research at the OFR is published in three primary venues: OFR 

Working Papers, OFR Briefs, and OFR Staff Discussion Papers.

The OFR launched its Working Paper Series in January 2012 for staff researchers to 

collaborate with outside research experts, expanding its virtual research community and

leveraging the expertise of the OFR’s staff. The OFR Working Paper series has been very 

successful in the academic and regulatory communities. They have been presented at 

conferences and cited in the press and in the academic literature; about half have gone on to 

publication in academic journals.

The OFR has published 21 working papers to date – including two in FY 2012, nine in FY

2013, seven in FY 2014, and three in FY 2015. The research is diverse, with the strong 

common theme of improving our collective understanding of the causes and consequences of 

financial instability. Examples in FY 2014 include developing a funding map to trace the 

paths of risk in a typical bank/dealer, data visualization for monitoring financial stability, and 

agent-based models of financial vulnerability. Policy-related topics include dynamic 

mapping of shadow banking and scenario design in regulatory stress testing.

The OFR launched the Briefs and Staff Discussion Papers series in 2014. OFR Briefs are 

less academic than working papers and are intended to provide an opportunity for the OFR to 

describe, for the general public, analysis of important policy issues and financial stability 

topics. No briefs have yet been published, as this is a new publication series. Briefs can

profile specific proposed financial stability metrics and monitoring tools; provide technical 

primers or reference guides for key areas, such as secured finance transactions and highfrequency trading; digest for a broader audience the OFR’s published academic research;

summarize ongoing research programs; describe the OFR’s progress in addressing gaps in 

data for financial stability monitoring; or describe and promote progress in financial data 

standards implementation.

OFR Staff Discussion Papers provide a venue for OFR staff to post academic-style papers 

that contribute to OFR’s understanding of financial markets, financial data, and financial 
OFR - 8

institution risks. They may be preliminary versions of work intended for the OFR Working 

Paper series or research papers intended for submission to external academic publications in 

economics or finance. Staff Discussion Papers in 2014 included topics such as risk 

management and visual analysis of financial transactions data.

In FY 2014, the OFR continued to make progress in fulfilling its responsibility to conduct 

studies and provide advice on the impact of policies related to systemic risk. In addition to 

producing working papers related to stress testing and capital weighting rules, the OFR has 

hired a senior manager for the Policy Studies section and is adding expert staff to that unit.

Interagency Partnership

In May 2013, the OFR announced a partnership with the National Science Foundation (NSF) 

to promote and support research related to financial stability.4

 The OFR and NSF’s 

Directorate for Computer and Information Science and Engineering are collaborating to fund 

innovative research on approaches to computing and information processing to identify and 

analyze risks to the financial system. The joint OFR/NSF program is known as 

“Computational and Information Processing Approaches to and Infrastructure in support of, 

Financial Research and Analysis and Management” (CIFRAM). CIFRAM uses NSF’s 

Early-concept Grants for Exploratory Research (EAGER) mechanism to focus on issues 

closely linked to financial stability while sponsoring research that is early stage, exploratory, 

and potentially transformative. To date, the grants program has issued four grants totaling 

approximately $1 million. .

5. Promoting Best Practices in Risk Management

As part of the OFR’s research function, it is required to analyze the impact of policies related 

to financial stability. The Office conducts, coordinates, and sponsors research to help 

improve regulation of financial entities and markets. The Office also conducts studies and 

advises on policies related to systemic risk. In addition, the Office is required to promote 

best practices for financial risk management, and evaluate and report on stress tests and other 

stability-related evaluations of financial entities.

Seven OFR working papers and one OFR Staff Discussion paper focus on key risk 

methodologies and practices, including: 

• On the Optimal Wealth Process in a Log-normal Market: Applications to Risk 

Management (July 2014)

• A Map of Funding Durability and Risk (May 2014)

• Stress Tests to Promote Financial Stability: Assessing Progress and Looking to the 

Future (July 2013)

• Stress Scenario Selection by Empirical Likelihood (April 2013)

• Systematic Scenario Selection (February 2013)

• CoCos, Bail-In, and Tail Risk (January 2013)

• Forging Best Practices in Risk Management (March 2012)

• A Survey of Systemic Risk Analytics (January 2012)

 4 http://www.treasury.gov/initiatives/ofr/research/Pages/GrantsProgram.aspx
OFR - 9

6. Building Critical Information Technology Infrastructure

Building information technology infrastructure and business systems is critical to the OFR’s 

support for the Council (and for broader stakeholders). The OFR needs highly specialized 

systems for: 

• Data acquisition, management, and dissemination (under strict protocols for security and 

data sharing); 

• A robust research and analytical environment for handling large amounts of data to 

support complex financial models, computations, and analysis; and 

• A secure platform for collaboration and communication with Council member agencies 

and outside researchers, as well as for public communication about OFR activities. 

During FY 2014, procurements for both the primary and alternate computing centers were 

completed, and installation of the primary center was completed in November 2013. At the time 

of this writing, the installation of the alternate compute center is completed and awaiting final 

security certification. We expect certification by the end of January 2015.

In FY 2015 OFR intends to modernize its desktop environment and introduce several capabilities 

to enhance collaboration, efficiency and production. These capabilities include advanced video 

conferencing and wireless.

To date, the agency leveraged non-analytic services provided by the Treasury, Office of the 

Chief Information Officer (OCIO) to the fullest reasonable extent. In FY 2015, we will be 

transitioning to our own non-analytic services in cases where our needs are not readily met by 

the standard Treasury offerings. 

Since its inception, the OFR has emphasized data security and protection of sensitive 

information. During both FY 2013 and FY 2014, the OFR installed a wide-range of security 

tools, services, and components that serve to provide a strong security posture. Additional 

security components will be added and/or enhanced in FY 2015.

7. Outreach and Collaboration

OFR Outreach

During FY 2014, the OFR continued to expand its team to manage communications, 

Congressional relations, publication development, Web content, and outreach to industry and

academia. The Office hired an Associate Director, Communications, to oversee our writing 

and editing, internal communications, speech development, website management, media 

relations, and design and graphics. The Office also began the hiring process for an Associate 

Director, Government Affairs, to oversee Congressional relations. This addition to the staff 

will complete the management team for External Affairs, which also includes a Chief of 

External Affairs, and an Associate Director, Industry and Academic Relations.

In addition, the Office launched a project to redesign its intranet site to foster employee 

engagement and continued to explore options for improving its public website. More than 

5,700 subscribers now receive notifications when the Office posts new Web content. 
OFR - 10

Research-Related Events 

Establishing strong relationships with outside experts is critical to the OFR’s effectiveness in 

fulfilling its research and analysis mandate. The OFR plans a regular schedule of four to six

research-focused events on annually from FY 2015 forward. The Office will also continue 

its in-house Research Seminar Series. During FY 2014, the Office held 65 seminars in the 

series. The OFR invited researchers in academia, government, and the private sector to 

present findings on a range of topics related to the OFR’s mission.

In January 2014, the OFR and the Council cohosted, “Mapping and Monitoring the Financial 

System: Liquidity, Funding, and Plumbing,” the third annual joint conference for leaders 

from the research and regulatory communities, public interest groups, and the financial 

services industry. The conference explored the interconnectedness among firms and markets, 

and related vulnerabilities in the financial system. 

In June 2014, the OFR co-sponsored a conference on financial stability with the Consortium 

for System Risk Analytics and the MIT Laboratory for Financial Engineering. The 

conference brought together researchers and practitioners to collaborate on topics related to 

financial stability.

In December 2014, the OFR and the Federal Reserve Bank of Cleveland co-sponsored a 

conference, “Measurement Challenges in Macro-Prudential Policy Implementation: Essential 

Data Elements for Preserving Financial Stability.”

Public Appearances by Senior Leaders

OFR senior leaders presented remarks at conferences and events related to financial stability, 

data standards and related topics during FY 2014. For example, the OFR Director delivered 

remarks to the Exchequer Club in Washington, D.C., in October 2013 about the role of the 

OFR in promoting financial stability. Director Berner also gave a presentation about the OFR 

and its work to Congressional staff members in April 2014. In addition, he gave keynote 

remarks in July 2014 about critical gaps in analysis, data, and policy during a symposium 

sponsored by The Clearing House and the Robert H. Smith School of Business at the 

University of Maryland.

The Chief Data Officer also delivered several speeches during the year on data standards.

Financial Research Advisory Committee 

In November 2012, the OFR established the Financial Research Advisory Committee, 

currently made up of 31 distinguished professionals in economics, data management, risk 

management, information technology, and other fields to broaden the OFR’s analytical 

perspective and help the agency meet its mission.5 Committee members have included two 

Nobel laureates in economics, leaders in business and nonprofit fields, and prominent 

researchers at major universities and think tanks. In 2014, 11 new members were added to 

the committee as others completed their rotations. 

 5 http://www.treasury.gov/initiatives/ofr/about/Pages/Financial-Research-Advisory-Committee.aspx
OFR - 11

The latest full meeting of the Financial Research Advisory Committee took place on July 24, 

2014 in New York. Key topics of discussion included “Metrics Needed to Measure the 

Swaps Market,” and “Liquidity and Market Impact During Stress Events.”

8. Building the OFR

During FY 2014, the OFR continued to build core operational systems and procedures, 

guided by the need to have cost-effective, transparent, and accountable structures that reflect 

best practices. The Office recognizes the value of balancing speed with prudence as the 

organization continues to mature – building core functions with ongoing review and 

improvements informed by early experience.

Strategic and Performance Management

The OFR follows the principles and practices of the Government Performance Results Act

Modernization Act of 2010. The OFR has implemented a comprehensive planning system 

that ties together strategic planning, operational planning (budget, performance, and human 

resources), execution, monitoring, and review, including internal reviews of projects, 

programs, priorities, and strategies. In addition, the OFR is collecting data on its 

performance measures, which are tied to its strategic and institution building goals.

In FY 2015, the OFR plans to release a new strategic plan for FY 2015-19 that builds on and 

significantly expands the Office’s earlier framework. In this strategic planning process, the 

Office assessed the organization internally and externally to develop effective goals, 

objectives and strategies, for the next four years. 

Financial Management and Operational Controls

The OFR’s financial activities are subject to general Treasury financial management controls 

and protocols and are reviewed as part of the consolidated audit of Treasury’s Departmental 

Offices. The OFR has internal policies and procedures to support sound and efficient 

operations and rigorous internal controls. The Office developed additional controls, project 

review mechanisms, and decision-making protocols to ensure that spending is well targeted 

and effectively monitored. The Office also established internal protocols to help ensure 

prompt responses to Treasury’s Office of the Inspector General, the Council of Inspectors 

General, and the Government Accountability Office.

Human Capital Planning

As detailed in the OFR’s 2014 Annual Report to Congress on Human Capital Planning, the 

Office has made progress in building its core staff and defining the frameworks and 

processes required for effective and efficient human resource management. By strategically 

using multiple recruitment methods, the OFR is building a talented staff dedicated to 

strengthening understanding of risks to financial stability. Strides have been made toward 

ensuring that employees are provided training and development opportunities to enhance 

existing skill sets and acquire new ones for professional growth. The OFR is also using 

workforce flexibilities to promote employee satisfaction, engagement, and work/life balance.

The OFR will continue to review and enhance its human capital strategies as part of its 

strategic planning framework to align with the Office’s mission, vision, goals, and objectives.
OFR - 12

FY 2014 Expenditures

Specific FY 2014 expenditures by budget activity include:

• Data Center expenditures focused on: (1) establishing a secure, short-term infrastructure for 

IT and business systems to support the OFR’s initial data and analytical functions, (2) 

launching the OFR’s intranet and collaboration platform, which also supports the secure 

sharing of information with the Council and its member agencies, (3) developing a design 

and support strategy for the OFR’s long-term IT infrastructure, including those related to 

information security programs (with related implementation expenditures expected to ramp

up in FY 2015), (4) defining the OFR’s data management model, and (5) conducting initial 

data acquisitions and creating an inventory of Council information.

• Research and Analysis costs include salaries and benefits, as well as work arrangements with 

outside researchers and the partnership with the National Science Foundation. 

• Operations and Support Services activities include (1) administrative support services, travel, 

supply, and equipment costs, and (2) costs for the rent and renovation of long-term 

permanent office space in Washington, D.C. The relatively high cost of contracts required 

for the build out the OFR long-term IT infrastructure (Table 2.2, Object Classification 25.3) 

reflects the OFR’s business model to leverage existing administrative resources in Treasury 

and other agencies. Specifically, administrative support services include expenses related to 

reimbursable support from Treasury’s Departmental Offices; personnel benefits services 

through the Office of the Comptroller of the Currency; and services from the Bureau of 

Public Debt Administrative Resource Center including human resource services, 

procurement services, and financial management services.

FY 2015 and FY 2016 Expenditures

The OFR will continue its prudent approach to expenditures as it grows in FY 2015 and 

FY 2016, with these expenditures closely tied to the goals and implementation priorities outlined 

in Section 1. The primary source of expenditure growth in FY 2015 and FY 2016 will be salary 

and benefits as the OFR workforce grows. 

• Data Center. Acquisition of hardware, software, and analytic tools for OFR’s initial 

business systems infrastructure and analytic environment (including network upgrades) was 

concentrated in both FY 2013 and FY 2014, with a decline in FY 2015. The OFR will focus 

in later years on maintenance, growth, periodic enhancements and increasing the value of 

prior investments. Expenses for data subscriptions will continue to rise as the OFR staff 

grows.

$14 

$39.5 

$65.3 $83.3 $99.5 $108.1 

 $-

 $20

 $40

 $60

 $80

 $100

 $120

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Millions

OFR Total Expenditures/Obligations

(FY 2011 - FY 2016)
OFR - 13

• Research and Analysis. Work arrangements with outside academics, and the partnership 

with the National Science Foundation to support ad hoc and on-going research projects are 

expected to increase modestly in FY 2015.

• Operations and Support Services. The OFR will continue to use existing Treasury 

infrastructure to minimize administrative costs. The build-out of a small satellite office in 

New York City to support interaction with New York-based market participants, researchers, 

regulators, and data providers that was undertaken in FY 2013 and has continued in FY 2014.

Assessments

Section 155 of Public Law 111-203, the Dodd-Frank Wall Street Reform and Consumer 

Protection Act (the Dodd-Frank Act), directs the Secretary of the Treasury to collect assessments 

equal to the total expenses of the Office of Financial Research (OFR) from bank holding 

companies with total consolidated assets of $50 billion or greater and nonbank financial 

companies supervised by the Board of Governors of the Federal Reserve System (the Board). 

Included in the expenses of the OFR are expenses of the Financial Stability Oversight Council 

(Council) and certain expenses of the Federal Deposit Insurance Corporation (FDIC) under 

section 210(n) of the Dodd-Frank Act. 

The regulation establishing the assessment schedule, as required under the Dodd-Frank Act, was 

published in the Federal Register on May 21, 2012 and became effective July 20, 2012. Under 

the rule, each company’s total assessable assets are determined based on data available on 

May 31 and November 30 each year, with assessments collected on September 15 (or next 

business day) and March 15 (or next business day). Companies are authorized under the rule to 

submit requests for redetermination if they wish to contest their eligibility as an assessable 

company or their total assessable assets. Assessment fees are collected in the Financial Research 

Fund (FRF), a fund established under Dodd-Frank Act to pay the expenses of the OFR.

The fee rate for each period will be set based on projected total resources required to replenish

the FRF to a level equivalent to the sum of:

• The next six months of budgeted operating expenses of the OFR and the Council; 

• The next 12 months of budgeted capital expenses of the OFR and the Council, because of the 

variability in the timing of such expenses; and 

• The amount necessary to reimburse the FDIC for certain implementation expenses.

As such, any resources remaining in the FRF at the end of one assessment period (carryover) 

reduce the amount needed to be collected to replenish the FRF to this level in the next period. 

Information pertaining to the FRF semiannual assessment is posted on Treasury’s 

website: http://www.treasury.gov/initiatives/ofr/about/Pages/Notice-of-Fees.aspx

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 supportsObjective 1.3: Complete implementation of financial regulatory reform initiatives and continue 

monitoring the markets for threats to stability.
OFR - 14

Section 2 – Budget Adjustments and Appropriation Language 

2.1 – Budget Adjustments Table

Dollars in Thousands

Office of Financial Research FTE Amount

FY 2015 Estimated 230 $99,548

Changes to Base:

Total FY 2016 Base 230 $99,548

Program Changes:

Program Increases: 40 $8,557

Personnel Steady State 40 $4,223

Non-Personnel Steady State - $4,334

Total FY 2016 Estimated 270 $108,105

2A – Budget Increases and Decreases Description

Program Increases...........................................................................+ $8,556,887

Personnel Steady State +$4,222,702 / +40 FTE

The OFR will continue its growth toward steady sate of approximately 290 on-boards by the end 

of FY 2016. 

Non-personnel Steady State + $4,334,185 / + 0 FTE

Although uncertainty remains about medium-term IT needs to meet the OFR’s data-related and 

analytical mandate, the Office expects the need for funding for initial investments in IT 

infrastructure to decrease beginning in FY 2015. Regular steady state operational costs, 

recurring network costs, and periodic one-time costs for IT and systems are expected to continue 

over time (for example, to meet data storage growth needs as more data sources are identified).
OFR - 15

2.2 – Operating Levels Table

Dollars in Thousands

Office of Financial Research FY 2014 FY 2015 FY 2016

Object Classification Actual Estimated Estimated

11.0 Full-time permanent 24,168 31,330 34,524

12.0 Personnel benefits 7,968 10,179 11,208

Total Personnel and Benefits Compensation A 32,136 41,509 45,732

21.0 Travel and Transportation of Persons 296 406 458

23.1 Rental Payments to GSA 3,488 4,325 4,954

23.3 Communication, Utilities, and Misc Charges 1,844 1,975 2,125

24.0 Printing and Reproduction 27 27 27

25.1 Advisory and assistance services 11,888 13,768 14,250

25.3 Other Goods and Services 11,670 13,026 13,768

26.0 Supplies and Materials 4,947 5,250 5,678

31.0 Equipment 16,970 19,262 21,013

Total Non-Personnel 51,130 58,039 62,373

Total Budgetary Resources $83,266 $99,548 $108,105

Budget Activities 3

 Data Center 46,940 57,991 64,034

 Research Center 7,700 14,578 16,108

 Operations and Support Services B 28,626 26,979 27,963

A Salary and benefits include direct OFR staff only. Object Classification 25.0, “Contractual Services,” and expenditures of 

“Operations and Support Services” include substantial reimbursable support received from Treasury’s Departmental Offices; 

personnel benefits services through the Office of the Comptroller of the Currency; and services from the Bureau of Fiscal Service 

Administrative Resource Center including Human Resource services, procurement services, and financial management services. 

B Operations and Support Services include two offices formerly located in the Data Center. The FTE totals and estimated budget 

amounts reflect this organizational change.

2B – Appropriations Language and Explanation of Changes

OFR receives no appropriations from Congress. 

2C – Legislative Proposals

OFR has no legislative proposals

Total Budgetary Resources $83,266 $99,548 $108,105 

FTE 166 230 270
OFR - 16

Section 3 – Budget and Performance Plan 

3A – Data Center

($64,034,000 from Assessments):

The Dodd-Frank Act requires the Data Center, on behalf of the Council, to collect, validate, and 

maintain all data necessary to carry out the duties of the OFR. Under this mandate, the Data 

Center provides data services to the Research and Analysis Center, Council member agencies, 

and others to:

• Increase efficiency in data acquisition and management;

• Reduce redundant reporting requirements across the regulatory system (including through 

more effective data sharing arrangements); and 

• Secure sensitive data.

Standards for financial data will benefit regulators and financial market participants by making 

data aggregation easier, improving analysis, and reducing costs associated with data collection. 

Support for the Council

The OFR has established two performance measures in FY 2014 and FY 2015 linked to 

achieving its goal of supporting the Council by securely providing high-quality financial data 

and analysis needed to monitor threats to financial stability, as follows:

• Percent of Council Work Requests completed by the OFR This measure serves as an 

indicator of the OFR’s capacity to meet the Council’s needs. The OFR tracks requests 

addressed by the Data Center and the Research and Analysis Center for this performance 

measure. In the future, the Office will seek to collect performance information on timeliness 

and quality of responses.

• Percent of Interagency Data Inventory Records Validated This measure shows the OFR’s 

progress in cataloging data that Council member agencies purchase from vendors, collect 

from industry, or derive from data. This measure replaced the discontinued measure 

“Percent of project milestones met for establishment of an interagency data inventory 

program.” Council member agencies may use the inventory identifying relevant data for 

what data is available in our quest to ensure that data is comprehensive and accessible to 

policy makers and the public.

Data Standards

The OFR has established one performance measure linked to achieving its goal to develop and 

promote data-related standards and best practices, as follows:

• Percent of Data standards Strategy Milestones Completed This measure indicates progress 

toward implementing the LEI and promoting data standards (through the completion of the 

May 2014 Aggregation Feasibility Study Group (AFSG) report, draft of the research note 

titled, “Opportunities for the Use of LEI within XBRL Report,” and build-out of the “U.S. 

Regulations Referencing LEIs” table). This measure replaced “Percent of milestones met in 

data standards strategy.”
OFR - 17

3.1.1 – Data Center Budget and Performance Plan

Dollars in thousands

Data Center

 Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Actual Actual Actual Actual Actual Estimated Estimated

Expenses/Obligations $0 $5,260 $19,303 $37,619 $46,940 $57,991 $64,034

 Budget Activity Total $0 $5,260 $19,303 $37,619 $46,940 $57,991 $64,034

 Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY2016

Actual Actual Actual Actual Actual Target Target

Percent of Responses to Council Data 

and Research Requests That Meet 

Delivery Targets 

N/A N/A N/A 94.0 DISC DISC DISC

Percent of Council Work Requests 

Completed by the OFR N/A N/A N/A N/A 89.0 85.0 85.0

Percent of Interagency Data Inventory 

Records Validated N/A N/A N/A N/A 60.0 DISC DISC

Percent of Data Standards Strategy 

Milestones Completed N/A N/A N/A N/A 93.0 DISC DISC

Key: DISC - Discontinued; B - Baseline

3B – Research and Analysis

($16,108,000 from Assessments):

The Dodd-Frank Act provided that the Research and Analysis Center, on behalf of the Council, 

develop and maintain independent analytical capabilities and computing resources to: 

• Develop and maintain metrics and reporting systems for risks to the financial stability of the 

United States;

• Monitor, investigate, and report on changes in system-wide risk levels and patterns to the 

Council and to Congress; 

• Conduct, coordinate, and sponsor research to support and improve regulation of financial 

entities and markets;

• Evaluate and report on stress tests or other stability-related evaluations of financial entities 

overseen by Council member agencies;

• Maintain the expertise necessary to support specific requests for advice and assistance from 

financial regulators;

• Investigate disruptions and failures in the financial markets, report findings, and make 

recommendations to the Council based on the findings;

• Conduct studies and provide advice on the effect of policies related to systemic risk; and

• Promote best practices for financial risk management.

To support effective achievement of these objectives, the OFR is establishing fora and networks 

to bring together experts from within and outside the regulatory system. The OFR’s Research 

Seminar Series allows OFR’s research staff opportunities to collaborate with and seek feedback 

from external experts. In addition, through its OFR Working Paper Series, OFR Staff Discussion 

Papers, OFR Briefs, and the OFR Annual Report, the OFR publishes results of its analysis to be 

transparent in its operations and promote public understanding of threats to financial stability. In 

FY 2013, the OFR announced a partnership with the NSF to promote and support research 
OFR - 18

related to financial stability. This program will fund innovative research on approaches to 

computing and information processing to identify and analyze risks to the financial system.

Leading Edge Research

The OFR has established two performance measures linked to achievement of its goal to provide 

leading edge research that improves financial stability monitoring and promote best practices for 

financial risk management, as follows:

1. Number of Research and Analysis Products Made Public This measure provides an indicator 

of research output at the OFR. The measure includes published research products such as 

OFR Reports, Working Papers, Staff Papers, and Briefs. 

2. Number of Collaborative Research and Analysis Products Made Public This measure 

indicates how researchers at the OFR collaborate and exchange ideas with outside 

perspectives, a key objective as the OFR builds a culture that supports cutting-edge research. 

3.1.2 – Research and Analysis Budget and Performance Plan

Dollars in thousands

Research and Analysis

 Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Actual Actual Actual Actual Actual Estimated Estimated

Expenses/Obligations $1,069 $3,398 $4,733 $7,700 $14,578 $16,108

Budget Activity Total $0 $1,069 $3,398 $4,733 $7,700 $14,578 $16,108

 Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Actual Actual Actual Actual Actual Target Target

Number of R&A Products Made Public N/A N/A N/A 10 11 15 15

Number of Collaborative Research and 

Analysis Products Made Public N/A N/A N/A 8 10 DISC DISC

Key: DISC - Discontinued; B – Baseline “

Research and Analysis” includes only staffing, outside work arrangements, and contracting related to annual report production. 

Costs associated with data, information systems, and analytical tools are under Data Center. 

3C – Operations and Support Services

($27,963,000 from Assessments):

The category “Operations and Support Services” includes Front Office, Operations, External 

Affairs, and Counsel activities. Those activities cover all operational, legal, and administrative 

functions that support the effective, transparent, and well-monitored delivery of the OFR’s 

products related to data, research, and analysis. This includes support provided through 

reimbursable arrangements with Treasury’s Departmental Offices; personnel benefits services 

through the Office of the Comptroller of the Currency; and services from the Bureau of Fiscal 

Service Administrative Resource Center including human resource, procurement, travel, and 

financial management services. 
OFR - 19

Public Information

The OFR has established a performance measure linked to achievement of its goal to provide the 

public with key data and analysis while protecting sensitive information, as follows:

1. Percent Increase in the Substantive Content Made Public on the OFR website This measure 

indicates the OFR’s progress in providing public access to financial research, analysis, and 

other information. 

Building the OFR

The OFR has two performance measures linked to its institution building and improvement goal, 

as follows: 

1. OFR Fiscal Year Expenditures as a Percentage of Total Assessed Assets, per Billion Dollars 

Assessed This measure is intended to reflect cost efficiency of the organization. However, 

uncertainties in the rate of growth of the organization have limited the usefulness of this 

measure and the OFR will seek to replace it in FY15. 

2. Total Staff (headcount) Hired Compared to Targets This measure shows the OFR’s progress 

toward target staffing levels. However, because counting full-time equivalent (FTE) 

positions is more useful for planning purposes, the Office plans to shift to an FTE-based 

measure in FY 2015.

3.1.3 – Operations and Support Services Budget and Performance Plan

Dollars in thousands

Operations and Front Office A

 Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Actual Actual Actual Actual Actual Estimated Estimated

Expenses/Obligations $4,700 $16,873 $22,953 $28,626 $26,979 $27,963

Budget Activity Total $0 $4,700 $16,873 $22,953 $28,626 $26,979 $27,963

 Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Actual Actual Actual Actual Actual Target Target

Percent Increase in the Substantive 

Content Made Public on the OFR 

Website 

N/A N/A N/A 1.0 13.0 DISC DISC

Cost of the OFR Relative to Total 

Assessed assets, per Billion Dollars 

Assessed

N/A N/A N/A 3,230 DISC DISC DISC

OFR Fiscal Year Expenditures as a 

Percentage of Total Assessed 

Assets, per Billion Dollars Assessed

N/A N/A N/A N/A 4,002 DISC DISC

Total Staff Hired Compared to 

Targets N/A N/A N/A 85.0 90.0 100.0 100.0

Key: DISC - Discontinued; B - Baseline

A Effective FY 2013, “Operations and Support Services” includes two offices formerly located in the Data Center. The FTEs and 

estimated budget amounts reflect this organizational change.

Changes to the measures in the tables above indicate OFR’s ongoing efforts to examine its

measures for effectively assessing the performance of the organization, and to revise them 

accordingly.