The Dodd-Frank Wall Street Reform and Consumer Protection Act requires the OFR to analyze threats to the financial stability of the United States each year and provide Congress with its key findings.

The Office of Financial Research's 2021 Annual Report found that while the economy rebounded, and volatility caused by the pandemic subsided, monetary policy, inflation, and cyber-attacks could heighten systemic risk.

From the Director

picture of Dino Falaschetti

Unlike last year’s report, which was written in the wake of a material threat to financial stability, this year’s report was written during a remarkable economic recovery. Throughout, the Office of Financial Research (OFR) supported the Financial Stability Oversight Council (FSOC) and its members with informative financial data and insightful research-based analysis. In doing so, our Office better complements our financial regulators in gauging and developing a better understanding of complex risks to U.S. financial stability and, ultimately, economic opportunities for American households and businesses. more

Risk Spotlights


  • Cyber risk has grown due to the mounting economic costs inflicted by cyberattacks and the increasing expense required to guard against them.
  • The price paid to address a cyberattack has gone up. In 2021, the U.S. led the world in the average cost of data breaches at $9.05 million, up 5% year-over-year. That is more than double the $4.24 million global average cost.
  • One factor driving up the cost of data breaches is the increasing downtime companies experience following successful cyberattacks. For example, victims face an average of 23 days of downtime following a successful ransomware attack.
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  • Macroeconomic uncertainty remains regarding the continuing impact of the virus and the pattern of inflation.
  • COVID-19 variants may continue to emerge, potentially threatening to derail the ongoing recovery.
  • If the global increase in prices persists for longer than currently anticipated, it could lead to a faster-than-expected rise in interest rates and, potentially, a repricing of risky assets.
  • Rising inflation increases the risk of an economic slowdown, though financial conditions remain stable.
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Climate Change

  • Although climate change has introduced vulnerabilities to the financial system, its potential risk to the financial system is still difficult to identify, assess, and forecast.
  • Assessing the risk to financial stability posed by climate change is complicated by the medium- to long-term nature of the threat. At the same time, markets tend to focus on more immediate-to-inter-mediate threats.
  • Climate change is expected to have a large and diffuse impact on various regions of the country, but at this point, it is difficult to assess how climate change will ripple through the economy and, in turn, the financial system.
  • Climate models provide an expectation of long-term climate changes, but data gaps between climate and economic models impede a full understanding of how climate change is expected to translate into deeper levels of financial risks.
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