Secretary of the Treasury Scott Bessent addressed the Financial Stability Oversight Council (FSOC) on December 11, 2025, highlighting a shift in focus for U.S. financial regulatory policy. In his prepared remarks, Bessent emphasized the administration’s commitment to fostering what he called “Parallel Prosperity,” aiming for economic growth that benefits both Wall Street and Main Street.
Bessent stated, “Since the first day of this Administration, we have focused on building Parallel Prosperity—an era of economic expansion where Wall Street and Main Street grow together. To that end, we have tirelessly pursued pro-growth policies to help unlock the potential available to all Americans when they are free to save, invest, innovate, build businesses, and drive their own economic destinies.”
He discussed FSOC’s role in supporting this vision by ensuring that financial system oversight avoids excessive regulation. “It is my firm belief that the Financial Stability Oversight Council plays an important role in ensuring that the financial system is contributing to this vision. Too often in the past, efforts to safeguard the financial system have resulted in burdensome and often duplicative regulations. Little thought was given to the harms of overregulation, the imbalance between costs imposed and benefits achieved, and the economic stagnation that can follow,” Bessent said.
Bessent described how current efforts seek a balance between long-term growth and stability: “Our Administration is changing that approach. We understand that sustainable long-term economic growth and economic security are both essential to financial stability. Today, I will explain how the Council is prioritizing these concepts in its work, and how they are reflected in this year’s annual report.”
He noted that robust economic growth provides a buffer for households and institutions against unexpected shocks: “Economic growth underpins financial stability. Growth contributes to higher earnings and capital cushions for financial institutions that can serve as buffers against unexpected losses. Similarly, households and businesses with stronger balance sheets are more resilient to shocks, less likely to default on debts, and more likely to maintain consumption and investment.” He also pointed out shortcomings in previous regulatory approaches: “Yet policymakers have not routinely considered the cumulative burdens of regulatory and supervisory regimes, the interactions among individual rules, or how a failure to modernize regulations can hurt both resilience and growth.”
Looking ahead internationally, Bessent highlighted plans for 2026: “The work we are doing at FSOC will be amplified by the United States when we host the G20 in 2026. The main priority of our host year will be on promoting economic growth and deregulation, which will include focusing on policies that will increase global prosperity by removing harmful regulations and barriers to innovation.”
He outlined FSOC’s statutory responsibilities: “The Council has a statutory duty to monitor financial regulatory proposals and developments. It also has a duty to make recommendations to enhance the integrity, efficiency, competitiveness, and stability of U.S. financial markets.” Bessent added that FSOC is reviewing areas where current regulations may hinder growth or impose unnecessary burdens.
On integrating national security concerns into financial analysis he said: “Economic security is also a necessary condition for financial stability. In the national security context ‘economic security’ is defined as having a secure and resilient domestic production capacity combined with reliable access to global resources necessary to maintain an acceptable standard of living.”
Bessent argued for including these considerations within FSOC’s framework: “This concept of economic security must be integrated into the financial stability analysis and the Council’s framework for understanding risks… Because fallout from decreasing living standards can contribute to financial instability.”
Technological innovation was cited as crucial for both priorities: “Economic security and financial stability are bolstered by technologies that keep our financial system secure and financial regulation that incentivizes flow of credit to strategic sectors.”
Accordingly, he explained FSOC’s future direction would prioritize both themes: “The twin priorities of economic growth and economic security will guide the Council’s future approach… The Council is operationalizing these priorities through interagency staff working groups…” Updates on progress are expected next year.
Finally Bessent announced changes reflected in this year’s annual report: “This year’s annual report also reflects reorientation of Council’s priorities… By introducing new structure centered on fostering economic growth & security we are focusing on issues matter most for enduring U.S. financial stability.”
