US Office of Financial Research releases 2015 Financial Stability Report

The OFR released its inaugural Financial Stability Report today. The 2015 Financial Stability Report analyzes threats to financial stability, evaluates policies to reduce those threats, describes actions to improve U.S. financial data, and reports key findings from OFR research. This report supplements and precedes the OFR 2015 Annual Report to Congress, which the OFR will publish in January.

In the Financial Stability Report, the OFR assessed vulnerabilities and resilience in the financial system, highlighting these areas of concern:

  • Credit risks are elevated and rising for U.S. nonfinancial businesses and in many emerging markets. A shock that significantly further impairs U.S. corporate or emerging market credit quality could poten­tially threaten U.S. financial stability.
  • Persistently low interest rates and suppressed risk premiums in U.S. fixed‐income markets contribute to excessive risk‐taking and borrowing that could pose financial stability risks. Although the Federal Reserve is expected to begin raising interest rates imminently, long-term interest rates may remain suppressed for some time.
  • The resilience of the financial system has improved significantly since the financial crisis, but it is uneven. Financial activity and risks have migrated outside the regulatory perimeter, market liquidity appears to have become more fragile in recent years, and interconnections among financial firms and markets are evolving in ways not fully understood.
  • Central clearing of derivatives has benefits for risk management, but concentrates risk in central counterparties, or CCPs, and may transmit or amplify stress in new ways.
  • Derivatives data reported to registered swap data repositories still have significant room for improvement. Further development of the framework to standardize and validate data is essential to improve data quality.
  • Enhanced capital and leverage requirements have made banks more resilient, but they also can have unintended consequences. OFR analysis shows areas where these requirements may increase incentives for risk‐taking by large, complex banking firms.

These assessments are informed by our Financial Stability Monitor, as well as broad financial system surveillance, data analysis, and research into specific vulnerabilities.

The Financial Stability Report is posted at and the online, expanded version of the Financial Stability Monitor is posted at

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