- Created on Sunday, 22 July 2012 13:41
- Written by IVN
Washington, DC - The U.S. Department of the Treasury’s Office of Financial Research (OFR) released its inaugural Annual Report to Congress Friday.
Under the Dodd-Frank Act, the OFR must report annually to Congress on threats to the financial stability of the United States; the status of efforts to meet its mission; and key findings from its research and analysis of the financial system.
“The Office of Financial Research is essential to building a framework for analyzing and measuring threats to financial stability. This report highlights the important progress made by the OFR in addressing weaknesses exposed by the financial crisis with data and analytical capacity not available before Wall Street Reform,” said Secretary Tim Geithner.
The report identifies some of the most significant gaps in the understanding of the financial system and in metrics to quantify financial activity. The report says these gaps continue to threaten financial stability and describes how the OFR—working with the Financial Stability Oversight Council—is taking the critical first steps to fill them.
Gaps exist in financial data, in the standards required to make data reliable and comparable, in the analysis used to assess financial stability, and in the tools available to achieve such stability. The report charts a course toward improving the knowledge and understanding of how the financial system works, how disruptions to its functioning can occur, and how better policy shock absorbers and guardrails can strengthen the system.
The report recognizes that because the financial system is constantly evolving and new risks emerge continuously, analysis of threats to financial stability must be dynamic and flexible. It emphasizes that better analysis and data can help reduce this uncertainty and inform the design of tools for making the financial system more resilient and less prone to shocks.