US Treasury Signals Easing of Financial Oversight Regulations: "Regulations Are an Excessive Burden"

Working Group on Artificial Intelligence Established

Scott Bessent, U.S. Secretary of the Treasury.

The financial regulatory body led by Scott Bessent, U.S. Secretary of the Treasury, is shifting its policy direction toward easing regulations that were strengthened after the 2008 U.S.-led global financial crisis. This change in direction is said to reflect both the U.S. government's prioritization of economic growth and Secretary Bessent's personal inclinations.

As chair of the Financial Stability Oversight Council (FSOC), Secretary Bessent on December 11 (local time) released a letter via the social media platform X (formerly Twitter), stating that FSOC should review regulatory relief measures that may burden economic growth.

In the letter, Secretary Bessent stated, "FSOC will work with its member agencies to examine whether certain elements of the U.S. financial regulatory framework impose excessive burdens and negatively impact economic growth, ultimately undermining financial stability."

He added, "Economic growth is critically important to financial stability. When economic performance and incomes rise, debt burdens decrease relative to income, loan repayment performance improves, and increased tax revenue strengthens the government's fiscal soundness. However, financial regulation and supervisory policies often fail to fully consider these economic effects."

Secretary Bessent also emphasized, "Economic security is the foundation of financial stability. Economic security means that the U.S. financial system can reliably provide the resources necessary for the real economy to support America's domestic production capacity, Americans' standard of living, and core national values."

Additionally, in this letter outlining FSOC's operational direction for next year, Secretary Bessent introduced the establishment of a working group to discuss ways to utilize artificial intelligence (AI) to improve regulatory efficiency, as well as a crisis response working group to address threats such as cyberattacks.

Established in 2010 following the 2008 global financial crisis, FSOC has focused on strengthening regulations on financial institutions and intensively supervising these entities. The Secretary of the Treasury serves as chair, with voting members including the Chair of the Federal Reserve, the Chair of the Securities and Exchange Commission (SEC), the Comptroller of the Currency (OCC), the Director of the Consumer Financial Protection Bureau (CFPB), and the Chair of the Federal Deposit Insurance Corporation (FDIC).

Political media outlet Politico analyzed that this approach aligns with both the broad deregulatory stance of the Donald Trump administration and Secretary Bessent's personal emphasis on 'economic growth.' Politico noted that some regulatory agencies participating in the council, such as the OCC and FDIC, have already rescinded regulations established during the Biden administration this year. These agencies are also accelerating the adoption and oversight reform of digital assets.