Bessent proposes a complete overhaul of the regulatory authority that emerged from the monetary disaster

Finance Minister Scott Bessent on Thursday proposed a major change in the government’s approach to financial regulation and stability.

In a letter published Thursday afternoon, Bessent will recommend changing the Financial Stability Oversight Council’s approach.

While the agency’s focus has been on tightening regulations and oversight of the institutions it oversees, the new plan will change that and push for looser regulation and a freer approach.

“[T]“The Council will work with and assist member agencies in considering whether aspects of the U.S. financial regulatory framework impose undue burdens and negatively impact economic growth, thereby undermining financial stability,” the letter said.

Bessent further noted that the impact of additional regulations will be assessed “in isolation” and not based on how they affect the economy more broadly.

“The cumulative burdens of regulatory and supervisory systems, as well as the interactions between individual regulations, are rarely taken into account,” he said.

FSOC was created in the wake of the 2008 financial crisis to monitor and address the types of systemic risks that led to the collapse of major Wall Street institutions and plunged the economy into its worst slump since the Great Depression. The council was established in 2010 as a result of efforts to prevent such a crisis from happening again.

As finance minister, Bessent heads the council. The proposal coincides with an FSOC meeting scheduled for Thursday, where he will present a letter outlining the status of his work.

The plan is also consistent with the Trump administration’s focus on deregulation, but represents a departure from the council’s long-standing trend toward greater regulation.

Along with the proposal, Bessent is forming a working group whose task will be to explore “possibilities for.” [artificial intelligence] to promote the resilience of the financial system while paying attention to potential risks to financial stability that could arise from the introduction of AI.”

Bessent will claim that reducing regulatory hurdles and supervision will strengthen the financial system and stimulate economic growth.