Treasury Secretary Scott Bessent is advocating for a shift in financial regulation, urging the Financial Stability Oversight Council (FSOC) to reassess its approach. Instead of consistently tightening rules, Bessent wants FSOC to evaluate whether existing regulations are hindering economic growth and financial stability. This marks a significant departure from past policies.Under Bessents leadership, FSOC has already begun moving away from overly active regulation, such as disbanding advisory panels focused on climate risk in banking. Bessents latest proposal further pushes this reset, aiming to streamline oversight and apply common-sense principles. He wants FSOC to examine the total cost of all rules since 2008, as many small banks and businesses have complained about the difficulty in obtaining credit due to these regulations.Bessent is also forming a working group on artificial intelligence to ensure the financial system remains strong while watching for potential risks from AI. The goal is to find ways AI can improve risk management and market operations, rather than simply regulating the technology out of existence.

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