Bessent pushes for overhaul of US bank regulations, calls dual capital plan ‘flawed’
U.S. Treasury Secretary Scott Bessent has urged regulators to pursue sweeping reforms of what he described as an outdated financial regulatory system, including abandoning the Biden-era proposal for dual capital requirements for banks.
Speaking at a Federal Reserve regulatory conference on Monday, Bessent warned that excessive capital rules were “choking lending,” stifling growth, and shifting credit to the non-bank sector, News.Az reports, citing Reuters.
Bessent criticized the 2023 dual-capital framework, introduced after the failures of Silicon Valley Bank and other institutions, saying it lacked a principled risk assessment and instead sought to “reverse-engineer higher and higher capital aggregates.” He argued that the proposal would have preserved “antiquated capital requirements” and undermined modernization efforts. “We need deeper reforms rooted in a long-term blueprint for innovation, financial stability, and resilient growth,” Bessent said.
The Trump administration is pushing a broader deregulatory agenda aimed at reducing banking constraints while maintaining financial safety and consumer protection. Bessent also called for capital relief for community banks, suggesting a voluntary opt-in system for modernized requirements. “Rationalizing and tailoring regulation does not have to amount to regulatory weakening,” he added, emphasizing that reforms would prioritize both growth and stability.
Similar news
