Rethinking Financial Regulation: Bessent's Call for Reform

U.S. Treasury Secretary Scott Bessent urged for significant reforms to an outdated financial regulatory framework, pointing out inefficiencies at a Federal Reserve conference on Monday. He emphasized that the current dual capital requirement, proposed under the Biden administration, may be overly burdensome for banks.

Bessent criticized these requirements for imposing unnecessary constraints on financial institutions, leading to reduced lending capacity and adversely affecting economic growth. He warned that this approach might be distorting markets by pushing lending activities towards the non-bank sector.

In his prepared remarks, Bessent called for 'deeper reforms rooted in a long-term blueprint for innovation, financial stability, and resilient growth,' suggesting a comprehensive overhaul of the regulatory system to better support financial market dynamics.

(With inputs from agencies.)