WASHINGTON (AP) — U.S. Treasury Secretary Scott Bessent is proposing to overhaul a regulatory panel that monitors the nation’s financial stability, advocating for looser regulations that he argues could bolster economic growth.
The Financial Stability Oversight Council (FSOC), established post-2008 financial crisis, plays a crucial role in identifying risks to the financial system and coordinating approaches among various regulators. In a statement released Thursday, Bessent expressed concern that past efforts to safeguard the financial system often resulted in a maze of 'burdensome and often duplicative regulations.'
'Our administration is changing that approach,' he emphasized.
This initiative includes assessing which parts of the regulatory framework may be excessively burdensome and detrimental to economic growth, thereby impacting financial stability.
The FSOC includes several key voting members: the Federal Reserve's Board of Governors, the Comptroller of the Currency, the director of the Consumer Financial Protection Bureau, the chairman of the Securities and Exchange Commission, among others.
Bessent noted the committee would begin discussions around this initiative in their meeting on Thursday.
Established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the FSOC was a response to the financial meltdown to prevent future economic disruptions. However, critics have already voiced serious warnings against Bessent's proposal.
Senator Elizabeth Warren, a Democrat from Massachusetts and a prominent critic of the Trump administration, argued that loosening financial regulations poses significant risks. She stated, 'Taking this hands-off approach to financial stability would leave our financial system and economy at greater risk in any economic environment.'
'Going down this path just as cracks are emerging in the financial system and yellow lights are flashing across our economy is especially reckless,' Warren added, citing several recent bankruptcies in the auto and home services sector as indicators of growing vulnerabilities.
