September 5, 2025

Bessent calls for Fed to give up banking oversight

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Scott Bessent, U.S. Secretary of the Treasury — WSJ, Sept. 5, 2025

🏛️Government💰Economy

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.

🏛️Government💰Economy

Test Your Knowledge

Under the Federal Reserve Act of 1913, is the Federal Reserve a private corporation owned by its member banks?

Banking supervision wasn't part of the Fed's original 1913 mission. Does this support Bessent's argument for removing it?

Silicon Valley Bank collapsed under Fed oversight in 2023. Does this prove Bessent's case that Fed banking supervision failed?

Bessent plans to use the Financial Stability Oversight Council to "drive change" in banking regulation. How does FSOC control affect his strategy?

The Panic of 1907 saw half of banks fail. Why did Congress create an independent Fed in 1913?

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People, bills, and sources

Scott Bessent

U.S. Treasury Secretary

Jerome Powell

Federal Reserve Chair

The Federal Reserve

U.S. central bank and bank supervisor

Karen Petrou

Founding partner, Federal Financial Analytics

Office of the Comptroller of the Currency

Federal bank regulator

What you can do

Legislative outreach

Press Congress to require hearings before any transfer of Fed oversight

Call the Senate switchboard at 202-224-3121 and tell your senators to oppose any transfer of Fed bank supervision. Ask your House member to press the House Financial Services Committee to hold public hearings first.

Regulatory monitoring

Monitor rulemaking and submit public comments

Watch Treasury and Federal Reserve dockets on Regulations.gov for any rulemaking or notice-and-comment on bank oversight. Submit timely public comments to record opposition and suggest alternatives.

Coalition building

Coordinate with watchdogs and track FSOC, Fed, and Treasury statements

Sign up for alerts from the Financial Stability Oversight Council, the Federal Reserve, and Treasury press offices to track developments. Work with groups like Americans for Financial Reform and Better Markets for joint statements and testimony.