The Financial Stability Oversight Council (FSOC) has unanimously approved its 2025 annual report, which assesses key financial stability issues and offers recommendations to address them. The report also summarizes the activities of the Council and its member agencies in managing potential threats to U.S. financial stability. According to the FSOC, U.S. financial markets and institutions operated effectively in 2025, supporting credit provision and asset price discovery.
Secretary of the Treasury Scott Bessent commented on the report’s release: “Since the first day of this Administration, we have focused on building Parallel Prosperity—an era of economic expansion where Wall Street and Main Street grow together. To that end, we have tirelessly pursued pro-growth policies to help unlock the potential available to all Americans when they are free to save, invest, innovate, build businesses, and drive their own economic destinies. It is my firm belief that the Financial Stability Oversight Council plays an important role in ensuring that the financial system is contributing to this vision.”
This year’s report highlights several priority areas:
Bolstering Treasury Market Resilience: The FSOC supports ongoing efforts by the Inter-Agency Working Group on Treasury Market Surveillance (IAWG) and encourages use of its new Market Resilience Working Group for monitoring initiatives aimed at strengthening Treasury market resilience. The Council backs Securities and Exchange Commission efforts for a central clearing mandate for Treasuries and endorses recent banking agency rule changes intended to improve market intermediation capacity. The FSOC also recommends close monitoring of developments such as new central counterparties for Treasuries and implementation of stablecoin legislation.
Addressing Cyber Risk: With cyber threats evolving rapidly from both nation-state actors and criminal groups targeting financial institutions, the FSOC calls for expanded joint monitoring among regulators and industry stakeholders. It supports increased use of scenario-driven tabletop exercises for preparedness, greater public sector adoption of artificial intelligence (AI), enhanced coordination between federal banking regulators and state authorities regarding third-party service providers, as well as legislative action to strengthen oversight powers at the Federal Housing Finance Agency. The Council also urges consideration of quantum computing risks in future cybersecurity planning.
Enhancing Supervisory Frameworks: The FSOC endorses actions taken by banking agencies and the National Credit Union Administration in 2025 aimed at improving supervision and regulation of banks and credit unions. It encourages further modernization efforts designed to enhance transparency while reducing unnecessary regulatory burdens.
Harnessing Artificial Intelligence: Noting increased AI adoption across financial services, the FSOC recommends using its Artificial Intelligence Working Group to explore how AI can promote system resilience while monitoring associated risks. Continued cooperation with domestic committees as well as international counterparts is encouraged.
The full text of the 2025 annual report is available online.
