Bank/Thrift Supervision   |    Capital    |    CFPB    |    Deposit Insurance    |    Interchange    |    Mortgage Finance
Municipal Advisors   |    OCC-OTS Merger   |    Preemption    |    QM - QRM    |    Swaps   |    Volcker Rule    |    Full Topics List
Qualified Mortgage - Qualified Residential Mortgage
Consumer Financial Protection Bureau - CFPB
Bank/Thrift Holding Company Supervision
Deposit Insurance
Mortgage Finance
Municipal Advisors
OCC-OTS Merger
Volcker Rule
Corporate Governance
Financial Stability Oversight Council (FSOC)
Office of Financial Research (OFR)
Systemic Risk
Supervision and Oversight
Payment, Clearing and Settlement
Prudential Supervision
Trust & Securities
Asset-Backed Securities
Resolution Authority

Wednesday, December 3, 2014

OFR Annual Report Outlines Rising Threats

Several threats to financial stability have risen over the past year, according to the third annual Office of Financial Research (OFR) report. The OFR noted that “although overall risks to financial stability are not particularly elevated compared to the pre-crisis period, some have clearly intensified over the past year.” The report, which is a requirement under the Dodd-Frank Act, highlighted the following three risks:

  • Evidence of excessive risk-taking during the extended period of low interest rates and low volatility
  • Markets have become more brittle because liquidity may be less available in a downturn and the risk of asset fire sales and runs in short-term wholesale funding markets remains unresolved
  • Financial activity is migrating toward areas of the financial system where threats are more difficult to assess because information is not available, and that activity may be consequential

If left unaddressed, the OFR believes these threats could adversely affect financial stability. The OFR described its effort to confront these challenges, such as creating tools to help policymakers and market participants assess potential threats, using a toolkit to analyze the marcoprudential policy, working to make data standards widespread in regulatory reporting and market practices and addressing data gaps.

Read the OFR report.

No comments:

Post a Comment

Please read our comment policy before making a comment.