Bessent to propose major overhaul of regulatory body created from financial crisis
Treasury Secretary Scott Bessent is proposing a major change in the government’s approach to financial regulation and stability, CNBC has learned.
In a letter to be published on Thursday, Bessent will recommend changing the Financial Stability Oversight Council’s approach.
While the agency’s focus has been on tightening regulation and oversight of the institutions it oversees, the new plan will change that and encourage looser regulation and a freer approach.
“The Council will work with and support member organizations in assessing whether certain aspects of the U.S. financial regulatory framework are unduly burdensome and undermine financial stability by adversely affecting economic growth,” the letter will state.
FSOC was created in the wake of the 2008 financial crisis to monitor and address the types of systemic risks that led to the collapse of major Wall Street institutions and plunged the economy into its worst slump since the Great Depression. The council was established in 2010 as a result of efforts to prevent such a crisis from happening again.
As treasury secretary, Bessent chairs the council. The offer coincides with an FSOC meeting scheduled for Thursday, at which he delivers a letter updating his status on his work.
The plan also dovetails with the Trump administration’s focus on deregulation but represents a shift from the council’s long-standing trend toward stronger regulations.
With the proposal, Bessent is creating a working group whose mission will be to “explore opportunities for companies.” [artificial intelligence] “Promoting the resilience of the financial system while also monitoring the potential risks to financial stability of AI adoption.”
Bessent will argue that reducing regulatory barriers and oversight will strengthen the financial system and increase economic growth.
