Bessent calls for Fed to give up banking oversight

The Treasury Secretary Scott Bessent published a Wall Street Journal essay on Sept. 5, 2025.

He called for an entire review of The Federal Reserve's role in bank supervision and emergency lending.

He urged that some supervisory powers be moved out of The Fed and coordinated by other agencies.

The Fed gained supervisory powers over time, especially after the 2008 financial crisis.

Today banking regulation is shared among The Federal Reserve, the FDIC, and the Office of the Comptroller of the Currency.

Congress created The Financial Stability Oversight Council in 2010 to coordinate systemic risk across agencies.

Bessent argued The Fed's mix of monetary policy and bank supervision creates conflicts and risks politicizing decisions.

His proposal drew criticism from former officials and analysts who warned it would weaken The Fed's independence.

Critics say reduced independence could make it harder for The Fed to control inflation and protect financial stability.

Bessent worked in private markets, including a stint at Soros Fund Management, before joining The Treasury.

Some ethics experts and lawmakers warned that his finance background raises conflict concerns if Treasury gains more oversight.

The essay forms part of an administration push to press The Fed for faster rate cuts and to reshape oversight.