Who manages systemic risk in the USA financial market infrastructure?

The management of systemic risk in the USA financial market infrastructure falls primarily under the purview of the Federal Reserve Bank. The Federal Reserve plays a critical role in overseeing the stability of the financial system and mitigating systemic risk, which is the potential for widespread disruptions that can affect the entire economic system.

The Federal Reserve conducts regular stress tests on major financial institutions and monitors financial market conditions to identify vulnerabilities. It also has the authority to implement macroprudential policies aimed at enhancing the resilience of the financial sector, thus helping to prevent cascading failures that could lead to significant economic downturns.

While other entities like the Department of Treasury, the Securities and Exchange Commission, and the Federal Deposit Insurance Corporation have important roles in financial oversight, their focus areas differ from that of the Federal Reserve. The Department of Treasury is more involved in fiscal policy and government financing, the Securities and Exchange Commission mainly regulates the securities markets and protects investors, and the Federal Deposit Insurance Corporation primarily insures deposits in banks and manages failure resolutions of insured institutions. Each agency contributes to the overall financial system's governance, but systemic risk management is specifically and primarily a responsibility of the Federal Reserve Bank.