The Office of Financial Research (OFR) was established in 2010 as part of the Treasury Department by the Dodd-Frank Act, which was enacted in response to the Global Financial Crisis (GFC). Its mission is to promote financial stability by delivering high-quality financial data, standards, and analysis. This information primarily supports the Financial Stability Oversight Council (FSOC), which includes federal financial regulators, state regulators, and an independent insurance expert. The OFR was created to address the lack of sufficient information and data about the financial system, particularly outside traditional, highly regulated banks. The OFR aims to fill these data gaps and provide independent and transparent assessments of financial risks and potential solutions.
The OFR collects and standardizes data about the financial system, making it more accessible to the public. One of its top priorities has been to gather data on short-term funding markets, which were inadequately monitored during the GFC. A significant accomplishment was the initiation of data collection on the centrally cleared repo market in 2019. This market involves participants borrowing cash for short periods from dealers by pledging U.S. Treasury securities and other collateral. In 2022, the OFR began collecting data on bilateral repo transactions, which are not centrally cleared. Recent estimates from the Federal Reserve indicate that the gross size of the U.S. repo market is approximately $12 trillion, with $4.6 trillion in the non-centrally cleared bilateral repo segment. The Federal Reserve Bank of New York uses data collected by the OFR and others to calculate the Secured Overnight Financing Rate (SOFR), which replaced the discredited London Interbank Offered Rate (LIBOR) as a widely used benchmark.
Tools and Assessments
The OFR maintains several tools to monitor the financial system. For example, its Hedge Fund Monitor tracks and analyzes trends in hedge fund exposures, leverage, and performance using data from both public and private sources. The OFR regularly assesses risks to financial stability. Its 2024 Annual Report to Congress highlights that in some key 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. 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.
Structure and Funding
The OFR is structured with a director who is nominated by the president and confirmed by the Senate, reporting to the Secretary of the Treasury. The OFR has three centers: a Data Center to standardize, validate, and maintain the data necessary to help regulators identify vulnerabilities in the system; a Research and Analysis Center to conduct, coordinate, and sponsor research to improve operational simplicity; and a Technology Center that provides the advanced analytics tools and computing infrastructure.
The OFR is funded through assessments on systemically important financial institutions (SIFIs), including certain large bank holding companies, global systemically important banks (G-SIBs), and designated nonbank financial companies. Its fiscal 2025 budget was $110.7 million, with a workforce of 196 people. For fiscal year 2026, it estimated a smaller budget of $85.5 million and a workforce of 72.
Controversy and Support
Some Republicans have advocated for eliminating funding for the OFR, arguing that it conducts redundant work and lacks fee oversight. Legislation to eliminate the OFR was introduced in 2019, 2021, and 2023, but these bills did not pass. In 2017, the House passed a bill to eliminate the OFR, but it did not pass the Senate. More recently, the House version of the One Big Beautiful Bill Act proposed sharply limiting the OFR budget, but this provision was killed by the Senate Parliamentarian and did not become law. In June 2025, dozens of former senior government officials, academics, and business leaders signed a letter to Congress arguing against reducing the agency’s budget so much that it couldn’t function. They stated that eliminating the OFR would undermine America’s capacity to maintain a stable financial system. The OFR has used its mandate and resources to improve the data and analytics available to U.S. financial regulators and market participants, promoting greater transparency about market risks. Its data standards and collections have received broad support in the financial community. Its data and analysis have contributed to the FSOC, under the leadership of the Treasury Department. Its research and analysis have made important contributions to FSOC member agencies’ and the public’s understanding of risks to financial stability. History shows that financial crises have high socioeconomic costs and that the economic recovery from such crises tends to be protracted. Defunding or significantly downsizing the OFR and its financial data and analytics would be a mistake, particularly given today’s elevated macro-financial uncertainties.
