By Rebecca Ungarino

Treasury Secretary Scott Bessent on Thursday outlined plans to rework the way a top financial regulatory body monitors the U.S. financial system for risks, as part of the Trump administration's broader agenda to loosen oversight of financial firms in favor of an approach that it argues promotes growth.

The Financial Stability Oversight Council, a panel of U.S. regulators formed in the aftermath of the 2008-09 financial crisis, will adopt a new approach to assessing threats to financial stability, Bessent wrote in a letter he posted on social media.

Bessent said the council, which he chairs, will now prioritize economic growth and security and pinpoint ways to ease regulation through its work. That is distinct from FSOC's earlier approach to evaluating risks, which he argued led to onerous regulation and stymied growth.

Big bank stocks ended the day higher in response as investors cheered fewer regulations.

The State Street SPDR S&P Bank ETF climbed to a record high, and shares of Goldman Sachs, Wells Fargo, and JPMorgan Chase all gained more than 2%. The S&P 500 climbed 0.2% higher.

Bessent's vision aligns with promises from other President Trump-appointed financial regulators to undo a web of Wall Street regulations that were introduced in 2010 to strengthen oversight of the financial system.

Their efforts have drawn fierce criticism from proponents of stricter regulation, who say less oversight could pave the way for new financial crises. Dennis Kelleher, cofounder and chief executive of Better Markets, a non-profit group that advocates for tighter regulation, said Thursday that he views Bessent's plans as harmful to financial stability.

"His pretext for this deregulation -- that financial regulation negatively impacts economic growth -- is false," said Kelleher, a former Democratic advisor who helped establish the Dodd-Frank Act. Deregulation, Kelleher said, "results in narrow, fragile, short term bubble growth, not sustainable, durable, broad-based growth that benefits all Americans."

The FSOC will "work with and support member agencies in considering whether aspects of the U.S. financial regulatory framework impose undue burdens" as it aims to maintain financial stability, Bessent said.

The council brings together the top U.S. financial regulators, including the Federal Reserve and the Securities and Exchange Commission. It makes recommendations to agencies, but is not a regulator itself.

The council will form new working groups, including one to explore ways that artificial intelligence could promote financial resilience while also tracking AI's potential risks, Bessent said. FSOC is "fostering a financial system that supports resilience, innovation, and enduring U.S. financial stability," he wrote on X.

On Thursday, Raymond James analysts said the administration's financial deregulatory agenda "is set to accelerate significantly" next year as Bessent coordinates federal banking regulators' efforts to ease constraints on lenders.

That push, analysts led by David Long wrote in a report, "likely culminates in the most bank-friendly regulatory environment in nearly two decades."

Write to Rebecca Ungarino at rebecca.ungarino@barrons.com

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December 11, 2025 17:54 ET (22:54 GMT)

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