Financial Stability Oversight 

Council 

FY 2014 

President’s Budget 
FSOC – 2

Table of Contents

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

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

Financial Stability Oversight Council .................................................................................... 3

Federal Deposit Insurance Corporation Payments ................................................................ 4

1.1 - Resource Detail Table ........................................................ Error! Bookmark not defined.

1B – Mission, Priorities and Context .......................................................................................... 5

Financial Stability Oversight Council .................................................................................... 5

Section 2 – Budget Adjustments and Appropriation Language ............................................... 7

2.1 - Budget Adjustments Table ................................................................................................ 7

2A – Budget Increases and Decreases Description..................................................................... 7

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

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

2.2 - Operating Levels Table ...................................................................................................... 8

Section 3 – Budget and Performance Plan ................................................................................. 9

3A – Financial Stability Oversight Council ................................................................................ 9

3B – Federal Deposit Insurance Corporation Payments ............................................................. 9
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Section 1 – Purpose 

1A – Mission Statement 

Financial Stability Oversight Council 

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 has important new authorities under the Act to: 

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

information across the financial system, drawing first from its member agencies, and to 

direct the OFR to collect additional information to assess risks to the financial system. 

The collection and analysis of that information will aid 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: In the run up to the 

financial crisis, some of the firms which posed the greatest risk to the financial system 

were not subject to adequate consolidated supervision. The 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 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 

Commodities Futures Trading Commission. 

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

standards for the large, interconnected bank holding companies and nonbank financial 

companies designated for enhanced supervision. Moreover, where the Council 

determines that certain practices or activities pose a threat to financial stability, the 

Council may make recommendations to the primary financial regulatory agencies for new 

or heightened standards. 
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 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 those 

firms that pose 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 will help eliminate gaps and 

weaknesses within the regulatory structure, to promote a safer and more stable 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 Act the Council’s administrative 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 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.
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1.1 Appropriations Detail Table 

Dollars in Thousands 

* Unobligated FRB balances originally designated for OFR were transferred to FSOC to cover FDIC reimbursement expenses for 

the period July 1, 2011 through July 20, 2012. 

1B –Vision, Priorities and Context 

Financial Stability Oversight Council

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, Dodd-Frank Act implementation included introducing stronger supervision, 

risk management, stress testing, and disclosure standards; establishing resolution plans and an 

orderly liquidation regime for financial companies; regulating the derivatives markets to reduce 

risk and increase transparency; reforming the securitization markets; enhancing standards and 

disclosure requirements for hedge fund advisers; and implementing measures to enhance 

consumer and investor protection. 

In addition, 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. 

Financial Stability Oversight Council

Budgetary Resources

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Assessments 9,000 14,322 19,455 10,455 116.17%

Transfers In/Out 14,250 0 0 0 0

 Transfer In from Federal Reserve Board (FRB) 8,000 0 0

 Transfer In from OFR (FRB Funding)* 6,250 0 0

Unobligated Balances from Prior Years 4,514 17,620 16,405 11,891 263.41%

Total Revenue/Offsetting Collections $27,764 $31,942 $35,860 $22,346 29.16%

Other Resources:

FSOC Secretariat 16 5,428 26 8,883 29 8,729 13 3,301 81.25% 60.81%

FDIC Payment 4,716 6,653 10,700 0 5,984 NA 126.89%

Total Expenses/Obligations 16 $10,144 26 $15,536 29 $19,429 13 $9,285 81.25% 91.53%

Net Results 16 $17,620 26 $16,405 29 $16,431 13 $13,061 81.25% -6.75%

Actual Estimated Estimated FY 2012 to FY 2014 FY 2012 to FY 2014

FY 2012 FY 2013 FY 2014 Change % Change
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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; 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. 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. 
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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 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

2A – Budget Increases and Decreases Description 

Support Adjustment – ($516,000)

A decrease in contracted support will occur in FY 2014 as a number of FSOC’s start-up 

initiatives will be complete. 

2B – Appropriations Language and Explanation of Changes 

The Financial Research Fund programs do not receive discretionary appropriation authority from 

the Congress. Therefore, no appropriations language is proposed. 

2C – Legislative Proposals 

There are no current proposals for amending the authorizing legislation. 
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2.2—Operating Levels Table 

Dollars in Thousands 

Financial Stability Oversight Council FY 2012 FY 2013 FY 2014

Object Classification Actual Estimated Estimated

11.1 Full-time permanent 2,074 3,155 3,601

12.0 Personnel benefits 533 1,108 1,265

Total Personnel and Benefits Compensation 2,607 4,263 4,866

21.0 Travel and transportation of persons 49 240 342

23.1 Rental payments to GSA 108 150 155

24.0 Printing and reproduction 1 85 86

25.2 Other services from non-Federal Sources 1,608 1,595 922

25.3 Other goods and services from Federal Sources15,612 8,446 12,320

26.0 Supplies and materials 147 467 418

31.0 Equipment 13 290 320

Total Non-Personnel 7,537 11,273 14,563

Total Budgetary Resources $10,144 $15,536 $19,429 

Budget Activities

FY 2012 FY 2013 FY 2014

Actual Estimated Estimated

Budget Activities:

Financial Stability Oversight Council 5,428 8,883 8,729

FDIC Payment 4,716 6,653 10,700

Total Budgetary Resources $10,144 $15,536 $19,429 

FTE 16 26 29 

1/ Includes FDIC Reimbursements. 
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Section 3 – Budget and Performance Plan 

3A – Financial Stability Oversight Council 

($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, the Secretary of the Treasury as Chair, the heads of eight federal financial regulatory 

agencies, 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 

Dollars in Thousands 

Financial Stability Oversight Council

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

Actual Actual Actual Estimated Estimated

Expenses/Obligations $0 $2,921 $5,428 $8,883 $8,729 

Budget Activity Total $0 $2,921 $5,428 $8,883 $8,729 

3B – Federal Deposit Insurance Corporation Payments 

($10,700,000 from assessments): 

The Council has a statutory mandate to reimburse certain FDIC expenses related to FDIC’s 

orderly liquidation of non-bank financial institutions as provided in Section 210(n)10 of the Act.

3.1.2 - FDIC Payment Budget and Performance Report and Plan 

Dollars in Thousands 

FDIC Payment

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

Actual Actual Actual Estimated Estimated

Expenses/Obligations $0 $0 $4,716 $6,653 $10,700 

Budget Activity Total $0 $0 $4,716 $6,653 $10,700