Treasury Secretary Calls for Looser Regulations to Enhance Financial Stability

Sat Dec 13 2025 16:22:36 GMT+0200 (Eastern European Standard Time)

In a bid to reform the Financial Stability Oversight Council, U.S. Treasury Secretary Scott Bessent proposes easing regulations that monitor the nation’s financial stability, a move faced with criticism from some lawmakers.

U.S. Treasury Secretary Scott Bessent has announced plans to overhaul the Financial Stability Oversight Council, advocating for less restrictive regulations to boost economic growth. This approach, however, has sparked controversy, especially among critics who warn it may pose risks to financial stability in light of recent financial vulnerabilities.

WASHINGTON (AP) — U.S. Treasury Secretary Scott Bessent is advocating for a significant overhaul of the Financial Stability Oversight Council (FSOC), proposing to loosen regulations that aim to safeguard the nation’s financial system.

Founded after the 2008 global financial crisis, the FSOC is responsible for monitoring potential risks within the financial system and ensuring coordination among various regulatory agencies. In a letter released on Thursday, Bessent criticized past regulatory measures as being overly burdensome, stating, “too often in the past, efforts to safeguard the financial system have resulted in burdensome and often duplicative regulations.”

Addressing the FSOC during its Thursday meeting, Bessent remarked that the council would evaluate how current regulations could be streamlined to eliminate undue burdens and nurture economic growth, which he believes is essential for financial stability.

The FSOC comprises key financial regulators, including the chair of the Federal Reserve, the Comptroller of the Currency, and the director of the Consumer Financial Protection Bureau, among others.

Established under the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, the FSOC was designed as a preventative measure against future economic crises. Bessent's proposal to ease regulatory measures has raised eyebrows among dissenters.

Senator Elizabeth Warren (D-Mass), a vocal critic of the Trump administration, condemned this potential regulatory relaxation. In a statement, she warned that a “hands-off approach” could exacerbate risks to the financial system, especially as signs of distress are emerging. She cited the recent bankruptcies of companies in various sectors as alarming indicators of instability.

As the FSOC deliberates on these changes, the financial community watches closely, weighing the implications of relaxing oversight as economic vulnerabilities surface.

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