Treasury Chief Bessent Moves to Slash U.S. Financial Regulations, Sparking Backlash
Treasury Secretary Scott Bessent confirmed Thursday that he is urging the U.S. government’s top financial safety watchdog to loosen regulations on the nation’s financial system, a move that could reshape how Wall Street is overseen.
The proposal from Bessent, who chairs the Financial Stability Oversight Council, sparked immediate debate about the future of financial safeguards. Critics warn deregulating now could weaken protections just as economic strains appear.
Bessent’s letter, released ahead of the FSOC meeting in Washington, said past efforts to protect the financial system have sometimes created “burdensome and often duplicative regulations,” and that the council should now identify rules that unnecessarily hinder economic growth.
The FSOC was established after the 2008 financial crisis under the Dodd-Frank Act to monitor systemic risks and coordinate key regulators, including the Federal Reserve, the Securities and Exchange Commission, and the Consumer Financial Protection Bureau.
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But Bessent’s plan calls for the council to focus more on boosting growth and resilience, arguing that stronger economic expansion and household stability make the financial system safer overall. The agenda reportedly includes new working groups on market resilience, household finances, and even artificial intelligence’s role in finance.
Sen. Elizabeth Warren, a frequent critic of deregulation, said loosening these safeguards “would leave our financial system at greater risk,” especially with recent corporate bankruptcies signaling stress in parts of the economy.
The shift could reshape FSOC’s mandate at a time when U.S. markets face mounting questions about risk, innovation, and growth. If adopted, the changes will likely influence future regulatory frameworks and how federal agencies coordinate oversight.
FSOC members are expected to continue deliberations into the coming year, with updated guidance and working group reports due next quarter.
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