What is the Office of Financial Research?

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 the wake of the Global Financial Crisis (GFC). Its mission is to “promote financial stability by delivering high-quality financial data, standards, and analysis” primarily to support the Financial Stability Oversight Council (FSOC), which is composed of federal financial regulators, state regulators, and an independent insurance expert. It was created because senior policymakers discovered during the GFC that they lacked sufficient information and data, particularly about the financial system outside traditional, highly regulated banks.

As Sen. Jeff Merkley (D-Ore.) put it at a 2014 Senate hearing, “OFR is supposed to be a kind of National Institute of Finance, to cure gaps in data and analysis, to engage in and support cutting-edge research, and to look through the complexity of our financial system and provide Congress and the public with independent and transparent assessment of what risks we face and what can be done about it.”

What does OFR do?

OFR collects and standardizes data about the financial system and makes it more accessible to the public. Responding to the lack of data about short-term funding markets available to policymakers during the GFC, one of OFR’s top priorities has been to collect and make available data on these markets.

One of its significant accomplishments was to begin, in 2019, collecting previously unavailable data on the centrally cleared repo market—where participants borrow cash for short periods from dealers pledging U.S. Treasury securities and other securities collateral. In 2022, OFR began to collect data on bilateral repo transactions, the ones that aren’t centrally cleared. Recent estimates from the Federal Reserve put the gross size of the U.S. repo market at a whopping $12 trillion, of which $4.6 trillion is in the non-centrally cleared bilateral repo segment.  

The Federal Reserve Bank of New York uses data collected by OFR and others to calculate the Secured Overnight Financing Rate (SOFR), a measure of what banks pay to borrow. SOFR replaced the discredited London Interbank Offered Rate (LIBOR) as a widely used benchmark.  

The agency maintains several gauges to monitor the financial system. For instance, its Hedge Fund Monitor tracks and analyzes trends in hedge fund exposures, leverage, and performance using data from both public and private sources.

OFR also regularly assesses risks to financial stability. For instance, its 2024 Annual Report to Congress notes, “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.”

How is the OFR structured?

The director, who is nominated by the president and confirmed by the Senate, reports to the Secretary of the Treasury. The last confirmed director, Dino Falaschetti, left in 2022. President Joe Biden nominated Ron Borzekowski for the post, but he failed to win Senate confirmation. As of this publishing, President Donald Trump has not nominated anyone for the post. The acting director is James Martin, who is the principal deputy director.

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.

How is OFR funded?

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, and it employed 196 people; it estimated a smaller budget—$85.5 million—and a workforce of 72 for fiscal year 2026.

Why do some Republicans say they want to wipe out funding for OFR?

Sen. Ted Cruz introduced legislation in 2019, 2021, and 2023 (each time co-sponsored by other Republican senators) to eliminate the OFR, arguing it conducts redundant work and lacks fee oversight. The bills didn’t pass. In 2017, the House passed a bill that would have, among other things, eliminated OFR. It didn’t pass the Senate. More recently, the House version of the One Big Beautiful Bill Act would have sharply limited the OFR budget, but the provision was killed by Senate Parliamentarian Elizabeth MacDonough and didn’t become law.

In June 2025, dozens of former senior government officials, academics, and business leaders—including former Federal Reserve Chair Ben Bernanke, former Federal Reserve Chair and Treasury Secretary Janet Yellen, Nobel laureate Robert Engle, and the OFR’s first director, Richard Berner—signed a letter to Congress arguing against reducing the agency’s budget so much that it couldn’t function. “Eliminating the OFR … would undermine America’s capacity to maintain a stable financial system,” they said. 

The letter concluded:

“The OFR has used its mandate and resources to improve the data and analytics available both confidentially to U.S. financial regulators and in aggregated form to 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 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 so given today’s elevated macro-financial uncertainties.”