OFR_2016_Financial-Stability-Report

Contents
Executive Summary ................................................................... 1
1 Financial Stability Assessment .................................................... 7
Monitoring Shadow Banking Risks ............................................. 13
2 Key Threats to Financial Stability ...............................................21
2.1 Potential Spillovers from Europe ................................................... 23
Risks for European Banks Remain High ........................................ 25
2.2 Risks in U.S. Nonfinancial Corporate Credit ...................................... 30
Commercial Real Estate Prices Have Risen Rapidly ........................... 36
2.3 Cybersecurity Incidents Affecting Financial Firms ................................ 38
Hackers Breach Bangladesh’s Central Bank ................................... 40
2.4 Central Counterparties as Contagion Channels .................................. 49
2.5 Pressure on U.S. Life Insurance Companies ....................................... 58
Low Interest Rates and Declining Equity Prices Drove Failures of
Japanese Life Insurers ........................................................... 60
Drivers of Insurers’ Systemic Risk Indicators .................................. 66
2.6 Systemic Footprints of Largest U.S. Banks ........................................ 68
Interest Rates and Derivatives Exposures Drive Banks’ Systemic
Risk Indicators ................................................................... 70
2.7 Deficiencies in Data and Data Management ..................................... 76
Broader Adoption of Data Standards Needed ................................ 80
Better Regulatory Sharing Needed ............................................ 82
Glossary ..................................................................................93
Bibliography ..........................................................................105