2019 Reports on Risks to Financial Stability

WASHINGTON – The U.S. Office of Financial Research today released its 2019 Annual Report to Congress. The Annual Report, which includes a financial stability risk assessment and key findings, describes risks to financial stability as moderate.

As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the report provides an update on the status of the efforts of the OFR in meeting its mission.

The 2019 Annual Report to Congress states that risks to U.S. financial stability remain in the medium range, reflecting a mix of high, moderate, and low risks in the financial system. Solvency and leverage risk continues to be low. Most other types of risk to financial stability are moderate. Of those moderate risks, macroeconomic risk is higher than a year ago. Credit risk is still moderate. Market risk remains elevated. Asset prices have appreciated with the strong U.S. economy. High asset prices can be a plus, but as past crises have shown, can also be vulnerable to declines.

During FY 2019, the OFR worked to fulfill its data-related mandates, including issuing a final rule to collect data covering centrally cleared funding regarding transactions in the U.S. repurchase agreement market, which will support a reliable, widely accepted, and transparent alternative to LIBOR. As another data initiative, the OFR helped to advance the adoption of the Legal Entity Identifier (LEI), which continues to grow rapidly.

The OFR also welcomed a new Director, Dino Falaschetti, and continued to support the Financial Stability Oversight Council and its members by providing data, research, and analysis.

The OFR 2019 Annual Report to Congress is available here.