The Trump administration is set to overhaul the Financial Stability Oversight Council (FSOC), a government watchdog responsible for monitoring risks to the financial system. Treasury Secretary Scott Bessent announced the changes, stating the FSOC will now focus more on boosting economic growth and alleviating the “undue burdens” imposed by strict financial rules. The FSOC is a panel created in the wake of the 2008 financial crisis, and is chaired by Bessent.
The shift involves easing financial regulations, with Bessent arguing that the costs of these regulations pose a risk to economic growth. To achieve this, the FSOC will establish working groups dedicated to market resilience and household resilience. These groups will likely examine current regulations and identify areas for potential reform or deregulation.
Additionally, a working group will be formed to explore the opportunities and risks presented by artificial intelligence. This indicates a forward-looking approach, acknowledging the growing importance of AI in the financial sector. The FSOC’s new direction signals a significant change in the approach to financial oversight under the current administration.
Bessent made the announcement on social media platform X, ahead of an FSOC meeting scheduled for Thursday afternoon. The council’s revised mandate reflects a broader effort to stimulate economic activity by reducing regulatory constraints on financial institutions.
