During an interview for the All-In Podcast, Treasury Secretary Scott Bessent said the Trump administration is re-examining “all bank regulation” with a focus on easing the burden for banks, although he singled out the supplementary leverage ratio as one regulation that could be eliminated.
Bessent said that regulators are incentivized to “keep tightening the corset” without regard to growth or “common sense.” He noted that bank regulation is primarily handled by the Federal Reserve, Office of the Comptroller of the Currency and the FDIC. Only the OCC is part of the Treasury Department. However, as Treasury secretary, Bessent is chairman of the Financial Stability Oversight Council, which has representatives from all three agencies.
“I plan to just keep pushing for safe, sound and smart deregulation. ‘Why are we doing this? Why are we doing that?’” Bessent said.
One regulation Bessent plans to reexamine is the supplementary leverage ratio: “There’s a capital charge to banks for buying Treasury bills … If we take that away — it’s become a binding constraint on banks — we may actually pull Treasury bill yields down by 30 to 70 basis points. Every basis point is a billion dollars a year.”
Bessent also said he supports maintaining the Fed’s independence in setting monetary policy although he was critical of the Fed’s handling of banking regulation.
“I actually think that some of the things they’ve done in regulation —some of the things they’ve done in climate and DEI, maybe even nonstandard monetary policy — threatens their independence and I want them to stay strong, robust and independent in monetary policy,” he said. “On regulation. I think that they have been much too harsh on especially the smaller banks [and] medium banks.”
