2024 Annual Report to Congress

The 2024 Annual Report to Congress provides an analysis of risks to financial stability in the United States and key findings from the OFR’s research and analysis. It also details the OFR's organizational efforts in meeting its missions of supporting the financial stability work of the Council and achieving organizational excellence.

Since last year’s report, risks to U.S. financial stability are largely unchanged, and key data gaps remain. In some asset markets, valuations and investor sentiment remain near extremes or the use of complex leveraged trading strategies has grown. Valuations in residential real estate markets remain stretched, while prices of commercial office properties are falling. Among nonfinancial businesses and households, most are able to service their debt, and vulnerabilities remain moderate. However, delinquency and default rates have risen for the debt of the less creditworthy of these borrowers. Solvency risk within the financial sector appears low overall, but smaller banks that are heavily exposed to the office property sector face a greater risk of insolvency. Leverage and other financial risks at some nonbank financial institutions increased. Money markets continue to face run risk due to structural features. Technology disruptions since the last report did not impair financial stability but revealed vulnerabilities that heighten the risk. Data gaps continue to limit visibility into potential vulnerabilities across parts of the financial sector.

Download Full Report Summary of Risks Status of the OFR Press Release

From the Office of the Director

Acting Director James Martin

This was another year of great progress for our Office in support of the Financial Stability Oversight Council and its member agencies. We saw the culmination of several years of work come to fruition during fiscal year 2024, as our staff made significant strides in collecting and providing data to further financial stability research and analysis and enabling collaboration and research among the Financial Stability Oversight Council’s member agencies.

Read the full director's letter

Report Highlights

  • Asset markets

    • Asset market vulnerabilities remain elevated.
    • Equity valuations and investor sentiment are high relative to historical averages, raising the risk of large, sudden price declines.
    • In residential real estate markets, price appreciation has moderated from a year ago, although valuations remain high. Commercial real estate prices are weak in the office sector.
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  • Businesses and households

    • Vulnerabilities associated with credit to businesses and households remain moderate.
    • Default rates on the debt of less creditworthy borrowers have been trending higher, although they remain below the levels reached during the COVID-19 pandemic.
    • Most households are able to make their debt payments, and vulnerabilities remain moderate overall in the household sector. Still, subprime borrowers’ debt balances have grown rapidly, and delinquency rates on their debt are rising.
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  • Financial institutions

    • Vulnerabilities at some nonbank financial institutions are growing and can amplify risk at other financial institutions.
    • Banks’ loan books appear healthy. Even so, some smaller banks with a high exposure to office loans have a greater risk of failing during the next few years.
    • For some types of nonbank financial institutions, vulnerabilities have been rising. For others, vulnerabilities are unchanged, or assessing the vulnerabilities is limited by data gaps regarding their leverage and portfolio exposures.
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  • Money markets

    • Vulnerabilities associated with money markets are moderate.
    • Maturity and liquidity risks are largely structural and expose money market institutions and instruments to significant run. risk.
    • Financial institutions, especially those with high leverage, are exposed to stress from their connected activities in money markets in general and markets for repurchase agreements (repos) in particular.
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