US Treasury chief promises changes in 'overregulation approach' in financial system

ISTANBUL

US Treasury Secretary Scott Bessent indicated Thursday that they would introduce looser regulations for the financial system, highlighting the imbalance between the costs and benefits of regulations.

Bessent said before the Financial Stability Oversight Council (FSOC) that in the past, attempts to protect the financial system have all too frequently led to onerous and frequently redundant laws.

"Little thought was given to the harms of overregulation, the imbalance between costs imposed and benefits achieved, and the economic stagnation that can follow. Our Administration is changing that approach," he noted.

Bessent stated that policymakers routinely fail to consider the cumulative burdens of regulatory and supervisory regimes, the interactions between individual rules, or how the failure to modernize regulations negatively impacts both resilience and growth.

Pointing to the FSOC's mandate to monitor financial regulatory proposals and developments, Bessent explained that it also assesses which aspects of the US financial regulatory framework create unnecessary burdens and which areas weaken financial stability by harming economic growth.

Bessent emphasized that economic growth and economic security priorities will guide the Council's approach to setting future priorities, assessing risks, and recommending regulatory or supervisory changes.

He noted that the FSOC implements these priorities through interagency working groups and will share updates on progress as work materializes next year.

Bessent stated that the working group on market resilience will monitor vulnerabilities that could affect financial stability, and will also assess whether regulations lead to market distortions or costs that could negatively impact economic growth and economic security.

He added that the artificial intelligence working group will conduct public-private sector dialogue to identify regulatory barriers preventing organizations in the financial services sector from responsibly adopting AI technologies.