The Financial Stability Oversight Council, the agencycreated to quickly identify and address risks to the stability ofthe U.S. financial system, needs greater transparency to do its jobcorrectly, the Government Accountability Office says in a newstudy.

The FSOC also needs to create a better system of coordination,and to share more information with the public, the studyasserts.

The GAO notes that coordination is important because the FSOC iscomposed of the heads of a number of disparate agencies.

The GAO report also voices concern with the work ofthe Office of Financial Research (OFR), which was createdto be the “back office” of the FSOC, producing financial data andestablishing metrics that members of the FSOC can use to measurefinancial risk within the system.

The GAO recommends that the FSOC and the OFR strengthentransparency and accountability by collecting and sharingfinancial-risk indicators, keeping detailed records of closed-doorsessions and developing forward-looking plans to help “prioritizethe threats.”

The report prompted two reactions. As part of the report, MaryMiller, Treasury undersecretary for domestic finance, said thatTreasury supports the recommendations.

She also said that the FSOC has already “moved quickly tofulfill its statutory mission” and “promote greater collaborationamong its members.”

Rep. Spencer Bachus, R-Ala., chairman of the House FinancialServices Committee, asked that the FSOC and the OFR “operatetransparently and efficiently, without imposing an undue burden onthe nation's financial system.”

Bachus's letter was sent to Timothy Geithner, secretary of theTreasury Department. Under the Dodd-Frank Act provision whichestablished the two agencies, the Treasury secretary heads theFSOC.

Bachus also demanded additional information.

The letter says that the OFR has not filled three of its topeight leadership positions, and asks what steps the TreasuryDepartment is taking to fill those spots.

Bachus also says that the GAO report found that the FSOC has nostrategic plan and uses its annual report as the only documentationfor its strategic framework. Moreover, the report found that theFSOC's annual reports are “vague with regard to recommendations andfail to identify entities responsible for implementing—and thetimeframes for completing—the recommendations.”

“Will the FSOC commit to making more detailed and specificrecommendations in its annual reports that specify whichmember-agencies are responsible for the implementations of therecommendations and the timeframes for implementing them?” Bachusasks. “If not, please state with specificity the FSOC'sreasons for not doing so.”

The report acknowledged that the FSOC and the OFR face“challenges” in doing their jobs, since risks to financialstability do not develop in precisely the same way in successivecrises.