1.2.5: Financial Stability

Evaluate the effectiveness and internal operations of the FSOC.

Other Information:

Financial stability oversight. The Dodd-Frank Act created the FSOC to, among other things, identify and respond to threats to the U.S. financial system. The FSOC is composed of 10 voting members (including the Chairman of the Board) and 5 non-voting members. Its responsibilities include designating nonbank financial companies that may pose a systemic risk. The FSOC may make recommendations to primary financial regulatory agencies to apply new or heightened standards and safeguards for financial activities or practices that could create or increase risks of significant liquidity, credit, or other problems spreading among bank holding companies, nonbank financial companies, and U.S. financial markets. The Board is required to establish, independently or based on an FSOC recommendation, heightened prudential standards for two types of institutions: (1) nonbank financial companies designated by the FSOC as systemically important and (2) bank holding companies with total consolidated assets of $50 billion or more. As discussed previously, the Dodd-Frank Act also established the CIGFO and named the Board's IG as a member. The CIGFO is authorized to establish working groups to evaluate the effectiveness and internal operations of the FSOC. Each IG within the CIGFO may detail staff and resources to such a working group, and the working group must submit regular reports to the FSOC and Congress regarding its oversight work.

Stakeholder(s):

• FSOC

Indicator(s):

Indicator:1

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