Treasury Secretary Scott Bessent is proposing a major change in how the government approaches financial regulation and stability, CNBC reported Thursday.
In a letter to the Financial Stability Oversight Council (FSOC), Bessent will urge the powerful post-crisis watchdog to flip its mindset.
Instead of constantly tightening rules, the council should examine whether regulations themselves are now threatening growth and, ironically, financial stability.
According to excerpts reported by CNBC, the letter says the council will work with member agencies to determine whether parts of the U.S. regulatory framework "impose undue burdens and negatively impact economic growth, thereby undermining financial stability."
That language marks a sharp break with the Obama-era Dodd-Frank regime that created FSOC in 2010 with a clear bias toward more red tape, more designations, and more supervisory power in Washington.
Newsmax reached out to both the Treasury Department and the White House for comment on the CNBC report.
FSOC brings together the heads of the Federal Reserve, Securities and Exchange Commission, Federal Deposit Insurance Corporation and other regulators under the Treasury secretary's chairmanship to identify systemic risks and respond to emerging threats.
Under Bessent, the council has already begun moving away from activist regulation.
In September it voted, without dissent, to disband two climate-risk advisory panels that had been central to the Biden administration's push to inject climate politics into bank oversight.
Bessent called that shift a "back to basics" approach that frees up capital for lending and growth.
Thursday's proposal pushes the reset button even harder.
Instead of treating every large firm as a potential villain, Bessent wants FSOC to scrutinize the cumulative cost of rules that have piled up since 2008 — a burden that community banks, regional lenders, and small businesses have long complained is choking credit.
Earlier this year, Bloomberg News reported Bessent began convening regulators to "streamline oversight" and apply "commonsense principles" so banks can better finance the real economy.
In a nod to innovation, Bessent is also forming an FSOC working group on artificial intelligence to "promote the resilience of the financial system while also monitoring for potential risks" from AI.
Rather than rushing to regulate the technology out of existence, the task force will look for ways AI can strengthen risk management and market functioning, even as it keeps an eye on new vulnerabilities.
Supporters of the shift say Bessent is doing exactly what Republicans promised: Undoing the mission creep that turned FSOC into a super-regulator, and refocusing it on protecting stability by first protecting growth.
The council’s own mandate includes "promoting market discipline" — not guaranteeing that Washington will always bail out bad decisions.
Charlie McCarthy ✉
Charlie McCarthy, a writer/editor at Newsmax, has nearly 40 years of experience covering news, sports, and politics.
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