The release of this report each year confirms in my mind the report’s value in summing up, on an annual basis, the financial stability risks confronting the U.S. economy, and getting the FSOC agencies to reach consensus on those risks.

I’d like to thank the FSOC staff and the staff of the FSOC agencies who prepared this Annual Report.

While the banking industry has proven to be quite resilient, in light of the large bank failures earlier this year, I am particularly appreciative of the Annual Report’s discussion of interest rate risk and its impact on underlying vulnerabilities in the banking system related to unrealized losses on securities and loans on bank balance sheets, concentrations of uninsured deposits, and commercial real estate, particularly in the office building sector.

The report also underscores the importance of the work the banking agencies are undertaking to strengthen supervision, and capital, liquidity, and resolution requirements.

One of the areas of major advancement for the Council this year has been with respect to non–bank financial risks. The Annual Report reflects the very robust risk analysis from staff on hedge funds and non–bank mortgage service providers. The new FSOC Analytic Framework and revised Non–Bank Designation Guidance have set the stage for thoughtful risk analysis and policy proposals for addressing these risks. Finally, I welcome the FSOC’s work to re–invigorate the financial market utilities committee, and that the Annual Report continues to highlight the need to review the risks in these systemically important operations, particularly in Central Clearing Counterparties.

There is a lot more in this Annual report, including the need for more work to safeguard the functioning of Treasury and repo markets, the development of climate–related financial risk analysis, and monitoring digital asset risks. But I think I’ll stop there, other than to thank the Secretary for her very strong leadership and commitment to the work of the FSOC.