Treasury Secretary Scott Bessent is proposing major changes to the government’s approach to financial regulation and stability, CNBC reported.
Bessent will recommend changes to the Financial Stability Oversight Council’s approach in a letter expected to be released Thursday.
The new plan will shift the agency’s focus on tougher regulation and oversight of regulators to promote deregulation and a more liberal approach.
“The Board will work with and assist member institutions in considering whether aspects of the U.S. financial regulatory framework impose an undue burden, adversely affect economic growth, and thereby undermine financial stability,” the letter reads.
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 financial institutions and plunged the economy into its worst downturn since the Great Depression. The council was established in 2010 as a result of efforts to prevent a recurrence of such a crisis.
Mr. Bessent will serve as Treasurer and Chair of the Council. The proposal coincides with an FSOC meeting scheduled for Thursday, where he will submit a letter updating FSOC’s position on the initiative.
The plan is consistent with the Trump administration’s emphasis on deregulation, but it marks a shift from the council’s long-standing tendency to tighten regulations.
Along with this proposal, Bessent is forming a working group whose mission is to “explore opportunities for[artificial intelligence]to promote resilience in the financial system, while monitoring potential risks to financial stability that may be posed by the introduction of AI.”
Bessent argues that lowering regulatory barriers and oversight will strengthen the financial system and foster economic growth.
