Financial Stability Oversight Council and Office of Financial Research 

Program Summary by Budget Activity 

(Dollars in thousands) 

Budget Activity FY 2010 FY 2011 FY 2012 Change FY10-FY12 

Actual Estimated Estimated $ Change % Change

 Financial Stability Oversight Council $0 $7,435 $7,885 $450 6.1%

 Office of Financial Research $0 $33,890 $74,468 $40,578 119.7%

Total Cost of Operations $0 $41,325 $82,353 $41,028 99.3%

Explanation of Budget Estimate 

 

The Financial Stability Oversight Council 

(FSOC), established under the Dodd-Frank 

Wall Street Reform and Consumer Protection 

Act of 2010 (Dodd-Frank Act), held its first 

meeting on October 1, 2010, and successive 

meetings on November 23, 2010 and January 

18, 2011. Future meetings will be held on at 

least a quarterly basis. An integrated roadmap 

was released following the first meeting 

combining member agencies internal 

implementation plans, including timeframes 

for key deliverables. Over the next year, the 

FSOC is working to establish processes for 

designating nonbank financial companies and 

financial market utilities, developing 

recommendations for stricter standards for 

monitoring and reporting on systemic risk, and 

developing tools for monitoring the financial 

system for emerging risks. 

Under the Dodd-Frank Act, the Director of the 

Office of Financial Research (OFR) is 

appointed by the President and confirmed by 

the Senate. Prior to confirmation, Treasury, 

under the Secretary’s authority, is managing 

OFR with all of the Director’s statutory 

authority. 

OFR has two primary divisions: a Data Center 

and a Research and Analysis Center. The Data 

Center will in part set standards for financial 

reporting and work to improve the quality of 

financial data that is collected so it can be 

organized in ways that are more meaningful 

for identifying vulnerabilities in the system as 

a whole. The Research and Analysis Center 

will analyze market activities to identify 

potential risks to the financial system and 

report findings to FSOC members and 

Congress. 

OFR’s first priority is improving data 

standards to help FSOC monitor systemic risk 

and improve risk management, reporting and 

other business functions at individual financial 

firms. The problem of monitoring systemic 

risk is closely related to the risk management 

challenge that individual firms face. To 

monitor systemic risk, positions in thousands 

of diverse financial products, involving 

thousands of individual financial firms, have 

to be aggregated across the entire financial 

system. Standardizing the way financial 

transactions are reported can greatly facilitate 

this process for regulators and individual 

firms. The OFR will, in consultation with 

relevant stakeholders, develop standards for 

financial data. 

Purpose of Program 

 

Prior to the financial crisis of 2008-2009, the 

existing regulatory framework focused 

regulators 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 Act 

established the FSOC with a clear statutory 

mandate that created for the first time 
collective accountability for identifying and 

responding to emerging threats to financial 

stability. FSOC is a collaborative body 

chaired by the Secretary of the Treasury that 

brings together the expertise of the federal 

financial regulators, an insurance expert 

appointed by the President, and state 

regulators. The FSOC 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, FSOC 

administrative expenses are considered 

expenses of OFR and are paid for by OFR. 

OFR was established by the Dodd-Frank Act 

to support the FSOC and its members in its 

identification and analysis of risks in the 

financial system. To accomplish this, OFR 

will collect and standardize financial data, 

develop and publish key reference databases, 

and conduct research to identify potential 

sources of systemic risk. OFR is an office of 

the Department of the Treasury. 

Explanation of Budget Activities 

 

Under the terms of the Dodd-Frank Act, the 

OFR and the FSOC will be funded through 

mandatory transfers from the Federal Reserve 

until July 21, 2012. Thereafter, the two 

entities will be funded through assessments on 

bank holding companies with total 

consolidated assets of $50 billion or more, as 

well as non-bank financial institutions subject 

to supervision by the Federal Reserve Board. 

Financial Stability Oversight Council 

($7,885,000) FSOC has a clear statutory 

mandate to improve coordination among 

financial regulators and identify risks and 

respond to emerging threats to financial 

stability. FSOC has ten voting members, 

including nine federal financial regulatory 

agencies and an independent member with 

insurance expertise, and five non-voting 

members. As a coordinative body, FSOC is an 

executive agency of the Federal Government 

and is not a bureau or office of the Department 

of the Treasury. 

Office of Financial Research ($74,468,000)

The Dodd-Frank Act established OFR within 

the Treasury Department to support the FSOC 

and its members by improving the quality of 

financial data available to policymakers and by 

facilitating more robust and sophisticated 

analysis of the financial system. The data and 

analysis provided by OFR will enhance the 

FSOC’s ability to identify and analyze risks in 

the financial system. 

Description of Performance 

 

There are no measures specified for managing 

FSOC or OFR performance at this time. 

Information on FSOC is provided on 

www.treasury.gov, www.financialstability.gov 

and member agency websites. Transparency 

on FSOC decisions will be provided through 

annual reports to Congress and the public and 

testimony by the Chairperson on FSOC 

activities and emerging threats to financial 

stability. Information on OFR is available at 

www.treasury.gov/ofr. 

OFR, as an office of the Department of the 

Treasury, is currently working on developing a 

performance plan for office operations.