U.S. Department of the Treasury reorients FSOC 2025 annual report toward economic growth and security with priorities on Treasury markets cybersecurity regulatory modernization and AI

U.S. Treasury Secretary Scott Bessent, testifying before the Senate Banking Committee, outlined the Financial Stability Oversight Council’s 2025 annual report and a revised agenda that centers economic growth and economic security in the Council’s financial stability work. The report focuses on four policy areas: U.S. Treasury markets, cybersecurity, regulatory modernization, and artificial intelligence. The approach emphasizes identifying vulnerabilities that could lead to systemic crises and encouraging private-sector mitigation before recommending additional regulation, while also supporting efforts to avoid or pare back existing rules viewed as unnecessarily burdensome, particularly for community banks. On Treasury markets, FSOC will support member-agency work through the Inter-Agency Working Group on Treasury Market Surveillance and the Market Resilience Working Group, alongside ongoing monitoring and targeted reforms by individual agencies. On cybersecurity, the Council backs expanded information sharing, joint monitoring, and scenario-based exercises, and highlights cyber risks tied to third-party service providers. For regulatory modernization, the report points to supervision and regulation for banks and credit unions that address material risks and enhance transparency. On AI, FSOC prioritizes responsible use, working with public- and private-sector partners including international counterparts while monitoring emerging risks; the annual report also shifts away from treating most major markets and sectors as vulnerabilities in order to concentrate on a narrower set of issues.