Treasury Secretary Scott Bessent is proposing a major change in how the federal government approaches financial regulation and stability, CNBC reported.
Bessent said in a letter to be released Thursday that he will recommend changing the approach of the Financial Stability Oversight Council, CNBC said. Bessent chairs the council in his role as Treasury Secretary.
The FSOC had focused on tightening regulations and oversight of the institutions it oversees, but CNBC said the new plan will switch that, pushing for looser regulation and a freer approach instead.
FSOC Formed to Prevent Another Crisis
According to CNBC, the letter will say, “the Council will work with and support member agencies in considering whether aspects of the U.S. financial regulatory framework impose undue burdens and negatively impact economic growth, thereby undermining financial stability.”
The council was formed in the wake of the financial crisis of 2008 to monitor and address the type of systemic risk that led to the collapse of major Wall Street institutions and sent the economy into its worst slump since the Great Depression, CNBC said.
The FSOC was formed in 2010 in an attempt to prevent such a crisis from happening again.
Bessent’s proposal coincides with an FSOC meeting scheduled for Thursday at which he delivers a letter updating where the agency stands on its work.
CNBC said Bessent’s plan also lines up with the Trump administration’s focus on deregulation and represents a switch from the council’s long-standing tilt toward stronger regulation.
Bessent also said he is forming a working group whose mission will be to “explore opportunities for [artificial intelligence] to promote the resilience of the financial system while also monitoring for potential risks to financial stability that might be posed by the adoption of AI.”
CNBC said that Bessent will say that lowering regulator barriers and oversight will strengthen the financial system and boost economic growth.
