Financial Stability Oversight 

Council

FY 2017

President’s Budget

February 9, 2016
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Table of Contents

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

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

1.1 – Resource Detail Table ........................................................................................................3

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

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

2.1 – Budget Adjustments Table .................................................................................................7

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

2.2 – Operating Levels Table ......................................................................................................8

2B – Appropriations Language and Explanation of Changes.....................................................8

2C – Legislative Proposals..........................................................................................................8

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

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

3.1.1 – Financial Stability Oversight Council Budget and Performance Plan ............................9

3B – Federal Deposit Insurance Corporation Payments .............................................................9

3.1.2 – Federal Deposit Insurance Corporation Payments Budget and Performance Plan .........9
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Section 1 – Purpose

1A – Mission Statement

To identify risks to the financial stability of the United States, to promote market discipline, and to 

respond to emerging threats to the stability of the U.S. financial system.

1.1 – Resource Detail Table

Dollars in thousands

Financial Stability Oversight Council FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Budgetary Resources Actual Estimated Estimated $ Change % Change

FTE Amount FTE Amount FTE Amount FTE Amount FTE Amount

Revenue/Offsetting Collections

 Assessments 12,953 15,025 19,401 4,376 2.91%

 Unobligated Balances from Prior Years 11,524 11,099 11,801 702 6.32%

 Recoveries 359 450 450 0 0%

 Interest on Investments 3 6 7 1 16.67%

 Restoration of Sequestration Rescission 1,071 946 1,022 76 8.03%

Total Revenue/Offsetting Collections 25,909 27,526 32,681 5,155 18.73%

Other Resources:

 FSOC 22 6,236 34 8,133 36 8,519 2 386 5.88% 4.75%

 FDIC Payments 7,628 6,570 9,500 2,930 44.60%

Total Expenses 22 13,864 34 14,703 36 18,019 2 3,316 5.88% 22.55%

Sequestration Rescission (946) (1,022) 0 1,022 N/A

Net Results 11,099 11,801 14,662 2,861 24.24%

1B – Vision, Priorities, and Context

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 10 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 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.

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.
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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 Office of Financial Research (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 the 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.

• 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.

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

Council continued to evaluate whether to designate certain nonbank financial companies for Federal 

Reserve supervision and enhanced prudential standards, and conducted annual reviews for each of 

the three companies designated in 2013. In addition, the Council continued to monitor the eight 

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

2012. The Council also continued to identify and monitor potential risks to U.S. financial stability, 

including looking at potential risks related to cybersecurity, market structure, and central

counterparties. The Council also continued to analyze whether and how asset management products 

and activities could pose risks to U.S. financial stability, including by seeking public comment on 
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potential risks. Finally, the Council fulfilled explicit statutory requirements, including the 

completion of its fifth annual report to Congress; and served as a forum for discussion and 

coordination among the member agencies implementing the Dodd-Frank Act. For example, in 

May, the Council established a new interagency Regulation and Resolution Committee to facilitate

information sharing and coordination regarding heightened prudential standards, resolution, and 

other areas of financial services policy development.

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, 

outside it, or a combination of the two. Regulators are making progress in implementing the DoddFrank 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 is required by the Dodd-Frank 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 nearterm threats and addressing structural vulnerabilities in the financial system. The Council continues 

to be committed to providing transparency regarding its decisions and has provided a significant 

amount of information about its activities to the public. As part of its effort, the Council conducts 

regular open meetings, publicly releases meeting agendas and minutes, issues annual reports that 

detail the Council’s views on potential risks in the financial system, and solicits public input on both 

the rules governing how the Council conducts its business and the substantive issues it considers.

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 OFR, an office within the Department of the Treasury.

Federal Deposit Insurance Corporation (FDIC) 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 

rule writing and resolution planning consistent with the FDIC's implementation of its 

responsibilities under Title II of the Dodd-Frank Act.
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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, the Council supports — 

• Objective 1.3: Complete implementation of financial regulatory reform initiatives,

continue monitoring capital markets, and address threats to stability.
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Section 2 – Budget Adjustments and Appropriations Language

2.1 – Budget Adjustments Table

Dollars in Thousands

Financial Stability Oversight Council FTE Amount

FY 2016 Estimated 34 $14,703

Changes to Base:

Total FY 2016 Base 34 $14,703

Program Changes

Program Increases: 2 $3,346

Personnel 2 $416

FDIC Payments $2,930

Program Decreases: 0 ($30)

Non-Personnel ($30)

Total FY 2017 Estimated 36 $18,019

2A – Budget Increases and Decreases Description

Program Increases .....................................................................................+$3,346,000 / +2 FTE

Hiring Plan Adjustment +$416,000 / +2 FTE 

Five additional on-boards will be brought on in FY 2016. Steady state of 36 on-boards should be 

achieved by the end of FY 2016.

FDIC Payment Adjustment +$2,930,000 / + 0 FTE 

Due to unfilled vacancies in authorized positions that will be filled in FY 2016, and certain planned 

projects that were deferred to FY 2016, the FDIC is projecting expenses to be billed in FY 2017 of 

approximately $9.5 million.

Program Decreases ..........................................................................................-$30,000 / +0 FTE

Support Adjustment - $30,000 / -0 FTE 

A small downward adjustment will be realized in FY 2017 due to lower support costs.
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2.2 – Operating Levels Table

Dollars in Thousands

Financial Stability Oversight Council FY 2015 FY 2016 FY 2017 

Object Classification Actual Estimated Estimated

11.0 Personnel compensation 2,967 3,439 3,751

12.0 Personnel benefits 776 1,146 1,250

Total Personnel Compensation and Benefits 3,743 4,585 5,001

21.0 Travel and transportation of persons 35 132 135

23.1 Rental payments to GSA 137 152 154

23.3 Communication, utilities, and misc charges 1 9 16

24.0 Printing and reproduction 14 15 17

25.1 Advisory and assistance services 244 300 315

25.2 Other services from non-Federal sources 16 18 21

25.3 Other goods and services from Federal sources1 9,309 8,932 11,789

26.0 Supplies and materials 332 485 490

31.0 Equipment 33 75 81

Total Non-Personnel 10,121 10,118 13,018

Total Budgetary Resources $13,864 $14,703 $18,019 

Budget Activities:

FSOC 6,236 8,133 8,519

FDIC Payments 7,628 6,570 9,500

Total Budgetary Resources $13,864 $14,703 $18,019 

FTE 22 34 36 

1 Includes FDIC Payments

2B – Appropriations Language and Explanation of Changes

The FSOC receives no appropriations from Congress.

2C – Legislative Proposals

The FSOC has no legislative proposals.
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Section 3 – Budget and Performance Plan

3A – Financial Stability Oversight Council

($8,519,000 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. 

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 Plan

Dollars in Thousands

Resource Level FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $2,921 $5,428 $5,628 $7,660 $6,236 $8,133 $8,519

 Budget Activity Total $2,921 $5,428 $5,628 $7,660 $6,236 $8,133 $8,159

3B – Federal Deposit Insurance Corporation Payments

($9,500,000 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 

rule writing and resolution planning consistent with the FDIC's implementation of its 

responsibilities under Title II of the Dodd-Frank Act. 

3.1.2 – Federal Deposit Insurance Corporation Payments Budget and Performance Plan

Dollars in Thousands

Resource Level FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $0 $4,716 $6,327 $11,592 $7,628 $6,570 $9,500

 Budget Activity Total $0 $4,716 $6,327 $11,592 $7,628 $6,570 $9,500