Monday, July 23, 2012
The Office of Financial Research, within the U.S. Dept. of Treasury, was created by Dodd-Frank to serve the needs of the Financial Stability Oversight Council and member agencies, to collect and standardize financial data, to perform essential research and to develop new tools for measuring and monitoring risk in the financial system. It has issued its first Annual Report to describe how it is working to meet its statutory mandate in four areas:
- to analyze threats to financial stability
- to conduct research on financial stability
- to address data gaps
- to promote data standards
Its agenda going forward includes
work to develop more robust analytical frameworks for analysis to assess and monitor threats to financial stability, to evaluate mitigants to those threats, and to improve the scope and quality of financial data required for that work. Accordingly, we will focus on the forces that promote the migration of financial activities, including maturity transformation and the creation of money-like liabilities, into unregulated or lightly regulated markets—the so-called shadow banking system—and we will investigate in depth the behavior of short-term funding markets and collect better data on repo markets. We will build on the work on the three topics outlined in this report— indicators of threats to financial stability, stress testing, and risk management. We will employ network analysis and new data to research interconnectedness among financial institutions. Our data agenda is tied closely to our research agenda and includes further work on data standards to improve the quality of existing and new information.