Financial Markets and Institutions

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Open Recommendations

Financial Stability Oversight Council: Assessing Effectiveness Could Enhance Response to Systemic Risks

GAO-23-105708
Sep 14, 2023
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1 Open Recommendations
Agency Affected Recommendation Status
Department of the Treasury The Secretary of the Treasury should ensure that FSOC establishes a process for conducting regular and comprehensive reviews of its effectiveness, including the extent to which its policies, procedures, and governance structure facilitate its ability to respond to financial stability risks. (Recommendation 1)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Flood Insurance: FEMA's New Rate-Setting Methodology Improves Actuarial Soundness but Highlights Need for Broader Program Reform

GAO-23-105977
Jul 31, 2023
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11 Open Recommendations
Agency Affected Recommendation Status
Congress Congress should consider authorizing and requiring FEMA to incorporate the reserve fund assessment, to the extent necessary based on actuarial principles, into the risk charge within the full-risk premium. (Matter for Consideration 1)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Congress Congress should consider repealing the HFIAA surcharge and authorizing and requiring FEMA to replace forgone revenue with actuarially determined premium adjustments. (Matter for Consideration 2)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Congress Congress should consider providing any affordability assistance for flood insurance through a means-based program that is reflected in the federal budget rather than through statutorily discounted premiums. Options that Congress might consider include allowing assistance to be used for private policies and shortening or ending the period of discounted premiums for those that do not qualify for assistance. (Matter for Consideration 3)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Congress Congress should consider addressing NFIP's legacy and potential future debt and should consider the best means for doing so. Options for addressing the legacy debt include canceling the debt or creating specific repayment terms funded by a transparent premium surcharge. Options for addressing future debt include providing funding to make up for the statutorily-generated premium shortfall, allowing immediate transition to full-risk rates accompanied by a means-based assistance program, changing the financing of catastrophic losses, and enabling FEMA to purchase additional reinsurance. (Matter for Consideration 4)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Congress Congress should consider authorizing and requiring FEMA to allow private flood insurance coverage to satisfy NFIP's continuous coverage requirement. (Matter for Consideration 5)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Congress Congress should consider authorizing and requiring FEMA to offer risk-based partial refunds for midterm cancellations of NFIP policies that are replaced by private flood insurance policies and authorizing and requiring FEMA to implement these refunds in an actuarially sound manner. (Matter for Consideration 6)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Blockchain in Finance: Legislative and Regulatory Actions Are Needed to Ensure Comprehensive Oversight of Crypto Assets

GAO-23-105346
Jul 24, 2023
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9 Open Recommendations
4 Priority
Agency Affected Recommendation Status
Consumer Financial Protection Bureau The Director of the Consumer Financial Protection Bureau should jointly establish or adapt an existing formal coordination mechanism with CFTC, FDIC, the Federal Reserve, NCUA, OCC, and SEC for collectively identifying risks posed by blockchain-related products and services and formulating a timely regulatory response. To facilitate these objectives, this mechanism could include formal planning documents that establish the frequency of meetings and processes for identifying risks and responding to them within agreed-upon time frames. (Recommendation 1)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Commodity Futures Trading Commission The Chairman of the Commodity Futures Trading Commission should jointly establish or adapt an existing formal coordination mechanism with CFPB, FDIC, the Federal Reserve, NCUA, OCC, and SEC for collectively identifying risks posed by blockchain-related products and services and formulating a timely regulatory response. To facilitate these objectives, this mechanism could include formal planning documents that establish the frequency of meetings and processes for identifying risks and responding to them within agreed-upon time frames. (Recommendation 2)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Federal Deposit Insurance Corporation
Priority Rec.
This is a priority recommendation.
The Chairman of the Federal Deposit Insurance Corporation should jointly establish or adapt an existing formal coordination mechanism with CFPB, CFTC, the Federal Reserve, NCUA, OCC, and SEC for collectively identifying risks posed by blockchain-related products and services and formulating a timely regulatory response. To facilitate these objectives, this mechanism could include formal planning documents that establish the frequency of meetings and processes for identifying risks and responding to them within agreed-upon time frames. (Recommendation 3)
Open
FDIC neither agreed nor disagreed with the recommendation. In addition, FDIC noted it has coordinated through venues including the Financial Stability Oversight Council, the President's Working Group, and some international organizations. However, the regulators' coordination efforts have not always addressed risks posed by crypto assets in a timely manner. We maintain that a formal coordination mechanism focused on collectively identifying risks posed by blockchain-related products and services and formulating timely regulatory responses could improve protections for consumers and investors, mitigate illicit finance and threats to financial stability, and promote responsible innovation and U.S. competitiveness.
Federal Reserve System
Priority Rec.
This is a priority recommendation.
The Chair of the Board of Governors of the Federal Reserve System should jointly establish or adapt an existing formal coordination mechanism with CFPB, CFTC, FDIC, NCUA, OCC, and SEC for collectively identifying risks posed by blockchain-related products and services and formulating a timely regulatory response. To facilitate these objectives, this mechanism could include formal planning documents that establish the frequency of meetings and processes for identifying risks and responding to them within agreed-upon time frames. (Recommendation 4)
Open
The Federal Reserve neither agreed nor disagreed with the recommendation. In its agency comment letter, the Federal Reserve said it routinely engages with the other federal financial regulators on emerging risks posed by blockchain-related products and services. However, the regulators' coordination efforts have not always addressed risks posed by crypto assets in a timely manner. We maintain that a formal coordination mechanism focused on collectively identifying risks posed by blockchain-related products and services and formulating timely regulatory responses could improve protections for consumers and investors, mitigate illicit finance and threats to financial stability, and promote responsible innovation and U.S. competitiveness.
National Credit Union Administration The Chairman of the National Credit Union Administration should jointly establish or adapt an existing formal coordination mechanism with CFPB, CFTC, FDIC, the Federal Reserve, OCC, and SEC for collectively identifying risks posed by blockchain-related products and services and formulating a timely regulatory response. To facilitate these objectives, this mechanism could include formal planning documents that establish the frequency of meetings and processes for identifying risks and responding to them within agreed-upon time frames. (Recommendation 5)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Office of the Comptroller of the Currency
Priority Rec.
This is a priority recommendation.
The Comptroller of the Currency should jointly establish or adapt an existing formal coordination mechanism with CFPB, CFTC, FDIC, the Federal Reserve, NCUA, and SEC for collectively identifying risks posed by blockchain-related products and services and formulating a timely regulatory response. To facilitate these objectives, this mechanism could include formal planning documents that establish the frequency of meetings and processes for identifying risks and responding to them within agreed-upon time frames. (Recommendation 6)
Open
OCC neither agreed nor disagreed with the recommendation. In its agency comment letter, OCC said it continues to monitor, separately and in collaboration with the other federal financial regulators on emerging risks posed by blockchain-related products and services. However, the regulators' coordination efforts have not always addressed risks posed by crypto assets in a timely manner. We maintain that a formal coordination mechanism focused on collectively identifying risks posed by blockchain-related products and services and formulating timely regulatory responses could improve protections for consumers and investors, mitigate illicit finance and threats to financial stability, and promote responsible innovation and U.S. competitiveness.

Securities and Exchange Commission: Employee Views of Personnel Management Improved, but Action Needed on Measuring Diversity and Inclusion Goals

GAO-23-105459
Dec 22, 2022
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1 Open Recommendations
Agency Affected Recommendation Status
United States Securities and Exchange Commission The Director of SEC's Office of Minority and Women Inclusion should ensure that performance measures for SEC's diversity and inclusion strategic plan for fiscal years 2023–2026 align with the plan's goals and are clear, measurable, objective, and reliable. (Recommendation 1)
Open
SEC agreed with this recommendation. In June 2023, SEC stated that its Office of Minority and Women Inclusion had drafted a diversity, equity, inclusion, and accessibility strategic plan for fiscal years 2023-2026 and had worked to ensure that the performance measures in the plan aligned with the plan's goals and were clear, measurable, objective, and reliable. SEC stated that it planned to complete internal stakeholder reviews and finalize the strategic plan before the end of fiscal year 2023. We will continue to monitor SEC's actions to address this recommendation.
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