In testimony before a Congressional subcommittee, a GAO representative noted FSOC still lacks a comprehensive, systematic approach to identify emerging threats to financial stability. In 2012, GAO reported that FSOC’s approach might not help identify new risks or threats that member agencies had not already identified. According to GAO, the Office of Financial Research, or OFR, has made some progress in developing data tools to support FSOC since the 2012 report, but GAO’s recent observations of two of these tools suggest that one tool does not focus on risks to the financial system, while another remains in a prototype phase.
GAO noted FSOC has taken steps to improve its communication with the public but could do more to improve transparency and accountability. FSOC approved a revised transparency policy, and FSOC staff said they had attempted to provide more information in the minutes of meetings. But FSOC staff said that they did not intend to keep detailed minutes because of the confidential information discussed. Also, FSOC staff also said that the impact of designating nonbanks for enhanced supervision would be assessed as part of a mandated January 2016 study. However, FSOC has not begun to prepare for this study according to GAO. GAO has reported on the importance of advance planning for retrospective studies so that needed data are collected.
According to GAO, FSOC staff said they did not plan to clarify the roles and responsibilities of FSOC, OFR, and member agencies because the overlapping responsibilities for monitoring systemic risk had not been problematic. Officials also said that FSOC would not adopt practices to coordinate rulemaking across member agencies, as it does not have the authority to direct independent agencies. GAO maintains that action is needed as its past work has shown that the lack of clear roles and coordination can lead to duplication, confusion, and regulatory gaps.