On January 27, 2016, the Office of Financial Research (OFR), an arm of the Treasury Department created under the Dodd-Frank Act, issued its fourth annual report to Congress. The report highlights the results of OFR research, risks to financial markets, and OFR priorities for the coming year. Notable among its findings, the report suggests that reforms mandating central counterparties in the formerly OTC swaps market could unintentionally increase systemic risk in the long run rather than reducing it.   

Congress has once again expressed concerns about SIFI designation and the asset management industry, and in particular the openness and integrity of the regulatory bodies developing SIFI policy. In reaction to the Office of Financial Research's (OFR) September 2013 report analyzing the potential systemic risks of the asset management industry, 41 members of Congress penned an April 9, 2013 letter to the Financial Stability Oversight Council requesting that any further review of the asset management industry take place “in an open and transparent manner.” The bipartisan letter also harshly criticizes the OFR report substantively and requests that the FSOC revisit its process and findings to “precisely identify the systemic risks it is trying to address” and “explain in detail how any identified risks would be mitigated” by subjecting asset management firms to supervision by the Federal Reserve. In addition, the letter urges that any regulatory action ultimately implemented should “not limit access to these services or cause them to become cost-prohibitive.”