![]() ![]() Issuing a congressionally mandated annual report, and Issuing nonbinding recommendations to member agencies,įacilitating the resolution of jurisdictional issues among member agencies, Three of the many relevant factors used for designation include leverage, interconnectedness with other systemically important nonbank financial institutions (SIFIs), and whether a primary prudential regulator already has responsibility for the SIFI and the activity.Īdditional FSOC and OFR responsibilities includeĬollection and analysis of financial data, The FSOC considers a company to pose a threat to financial stability if a company’s financial distress or activities could be transmitted to other firms or markets, causing broader disruptions to financial intermediation or other financial market functions. However, it is responsible for monitoring financial stability and designating nonbank financial companies and financial market utilities as systemic, which subjects those entities to heightened prudential regulation and the direct regulatory authority of other agencies. The FSOC does not generally have direct regulatory authority its role is to make policy recommendations to member agencies where authority already exists or to Congress where additional authority is needed. The OFR supports the FSOC with data collection, research, and analysis. To foster coordination and communication, the FSOC assembles the heads of federal financial regulators, representatives from state regulatory bodies, and an independent insurance expert in a single venue. Some observers argue that communication and coordination of financial regulators was insufficient to prevent the financial crisis of 2008. 111-203) to address several potential sources of systemic risk. The Financial Stability Oversight Council (FSOC) and its Office of Financial Research (OFR) were established by the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. ![]()
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