Key Insights from Treasury Secretary Scott Bessent: Highlights from the Federal Reserve Capital Conference

Good evening! I’m glad to be here tonight.

Let’s talk about the urgent need for financial reform. Community banks are feeling the pressure, and it’s time we pay them attention. Earlier this year, I shared principles to build a financial system that serves everyone, not just Wall Street.

So far, we’ve made progress. Bank regulators are rethinking outdated rules. They’re working on simplifying the Community Reinvestment Act and focusing on significant financial risks. However, these efforts alone won’t cut it. We need a long-term plan that ensures growth and stability for all.

For too long, regulation has reacted to crises instead of preventing them. This “reactive” approach often burdens community banks. It’s time for a shift. Instead of piling on more rules, we should create a clear vision for our financial system.

Experts in finance agree on this need for proactive strategies. A recent study from the Federal Reserve showed that overly strict regulations can stifle lending, especially for community banks. When banks face high capital requirements, they tend to lend less, which can hurt economic growth.

The Treasury Department has a crucial role here. Historically, it has guided the financial system through crises and helped shape economic policies. Our focus should be on promoting growth and protecting consumers without drowning banks in excessive rules.

We also need to address how regulations impact digital assets. As technology rapidly evolves, the pace of regulation hasn’t kept up, leaving gaps that can be risky. A balanced approach can foster innovation while safeguarding our financial system.

Additionally, surveys show that many Americans are concerned about their financial security. People want to feel safe when using their banks. Ensuring that community banks can thrive is key to meeting these expectations.

In conclusion, we have work ahead of us. Let’s focus on creating regulations that support community banks, encourage lending, and consider cutting-edge technologies. With careful planning and collaboration among regulators, we can build a financial system that works for everyone.



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