Bogota: 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.

According to Anadolu Agency, Bessent emphasized the need to reassess the regulatory framework, noting that little consideration was previously given to the negative impacts of overregulation, such as economic stagnation. He pointed out that policymakers often overlook the cumulative burdens of regulatory regimes and the failure to modernize regulations, which can adversely affect resilience and growth.

Bessent explained that the FSOC's role includes monitoring financial regulatory proposals and developments. The Council also evaluates which aspects of the US financial regulatory framework create unnecessary burdens and weaken financial stability by hindering economic growth. Economic growth and security priorities will direct the Council's future agendas, risk assessments, and recommendations for regulatory changes.

He detailed that the FSOC will implement these priorities through interagency working groups, with updates on progress expected next year. The market resilience working group will monitor vulnerabilities affecting financial stability and assess whether regulations cause market distortions or costs detrimental to economic growth and security.

Bessent also mentioned that the artificial intelligence working group will foster dialogue between the public and private sectors to identify regulatory barriers that hinder the responsible adoption of AI technologies in the financial services sector.