Treasury Secretary Bessent Pushes Plan to Loosen Financial Rules Set After 2008 Crisis

Treasury Secretary Scott Bessent is proposing a major shift in how the U.S. government oversees the financial system, signaling a move away from the strict regulatory approach put in place after the 2008 financial crisis.

According to people familiar with the matter, Bessent outlined the plan in a letter released Thursday, calling for changes to the mission and direction of the Financial Stability Oversight Council (FSOC). The proposal suggests that current regulations may be placing unnecessary strain on financial institutions and slowing economic growth.

A Shift Away From Tight Oversight

Since its creation, FSOC has focused on tighter supervision and stricter rules for large financial firms to prevent another crisis. Bessent’s proposal would reverse that approach, encouraging regulators to take a lighter touch.

In the letter, Bessent wrote that the council should help member agencies examine whether parts of the current regulatory system create excessive burdens that may actually weaken financial stability rather than protect it.

He argued that regulators often evaluate rules one at a time, without fully considering their combined impact on the broader economy.

“The cumulative effect of multiple rules and oversight programs is rarely examined,” Bessent noted, adding that this can limit growth and reduce flexibility across the financial system.

Background on FSOC

FSOC was established in 2010, following the collapse of major financial institutions during the 2008 crisis. Its goal was to identify and reduce systemic risks that could threaten the entire financial system.

The council brings together leaders from major regulatory agencies and is chaired by the Treasury secretary. As chair, Bessent has significant influence over its priorities and direction.

His proposal comes as FSOC prepares for a scheduled meeting on Thursday, where he is expected to formally update members on the council’s work and future plans.

Aligns With Broader Deregulation Efforts

The proposal fits with the Trump administration’s broader push for deregulation, which aims to reduce government involvement in business activity. However, it marks a clear departure from FSOC’s long-standing emphasis on stronger rules and safeguards.

Bessent is expected to argue that easing regulatory pressure could make financial institutions more resilient by allowing them to operate more efficiently and respond more quickly to economic changes.

New Focus on Artificial Intelligence

Alongside the regulatory changes, Bessent is also forming a new working group focused on artificial intelligence in finance.

The group will explore how AI can improve the stability and strength of the financial system while also watching for potential risks tied to its growing use. The goal is to ensure that new technologies support long-term stability without creating new systemic threats.

What This Could Mean Going Forward

Supporters of the plan say fewer regulatory hurdles could encourage lending, investment, and economic growth. Critics, however, may worry that easing oversight could increase risk if safeguards are reduced too far.

Bessent’s proposal does not immediately change regulations, but it sets the stage for a different philosophy one that prioritizes economic growth and flexibility alongside financial stability.

As the plan moves forward, it is likely to spark debate over how much regulation is enough to protect the system without slowing it down. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.