Financial Stability Oversight Council (FSOC)
A U.S. government body created by Dodd-Frank to monitor systemic risk and coordinate among financial regulators.
What is FSOC?
The Financial Stability Oversight Council (FSOC) is a U.S. interagency body established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 to identify and respond to emerging threats to U.S. financial stability. FSOC is chaired by the Secretary of the Treasury and includes the heads of all major U.S. financial regulatory agencies, including the Federal Reserve, SEC, CFTC, FDIC, OCC, and CFPB. One of FSOC's most significant powers is the ability to designate non-bank financial companies as Systemically Important Financial Institutions (SIFIs), subjecting them to enhanced Federal Reserve supervision and prudential standards.
Example
Following the 2008 financial crisis, FSOC was created specifically to address the regulatory gaps that allowed systemic risk to build undetected. In 2013, FSOC designated insurance giant MetLife as a SIFI—a decision MetLife successfully challenged in court in 2016, illustrating the tension between regulatory oversight and industry resistance to designation.
Source: U.S. Treasury — FSOC