On April 9, the Secretary of the Treasury, Scott Bessent, delivered a speech outlining the Trump Administration’s financial policy goals of empowering community banks, moving away from prioritizing large financial institutions. In his speech, Bessent explained that this “administration aims to give all banks the chance to succeed” highlighting the administration’s goal of reducing bureaucracy and enabling capital flow to Americans who need it. Bessent criticized past bank regulatory practices for a lack of accountability and transparency in exercising regulatory authority.
Bessent’s speech focused on the challenges faced by community banks, suggesting the Treasury would consider tailored regulation for community banks, including exemptions for community banks from certain rules, like third-party risk management and information security rules. Bessent also advocated for a shift in supervisory practices to focus on material financial risks rather than reputational risk, like defining “unsafe and unsound” in future rulemaking.
On capital requirements, Bessent expressed concerns about the Basel Committee’s Endgame standards, advocating for a U.S.-centric approach to enhance banks’ support for innovation and growth. He also discussed reassessing liquidity frameworks, including identifying opportunities to expand the role of loans as collateral for funding during stressful periods. Finally, Bessent outlined plans to revisit aspects of prudential regulation, including AML/Countering the Financing of Terrorism framework reforms, reforming deposit insurance, and assessing regulatory impediments to blockchain, stablecoins and new payment systems.
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