U.S. Department of the Treasury readout outlines FSOC chair priorities to refocus supervision on material risks and support ending reputational risk criticism

The U.S. Department of the Treasury published a readout of the Financial Stability Oversight Council (FSOC) meeting in which Treasury Secretary Scott Bessent, as chair, set priorities for enhancing member agencies’ supervisory and regulatory frameworks, including encouraging a re-focus of supervision on material financial risks and supporting banking agency work to remove reputational risk as a basis for supervisory criticism. FSOC also reviewed Treasury market resilience, with Treasury, the Securities and Exchange Commission and the Office of Financial Research updating members on market structure and liquidity, the SEC’s Treasury securities central clearing rule, and OFR data collection on non-centrally cleared bilateral repo transactions. Additional briefings covered the potential financial stability consequences of cyber incidents, including approaches to monitoring cyber vulnerabilities and lessons learned from previous events, and conditions in the homeowners insurance sector following recent natural disasters, where members discussed availability and rising costs of property insurance and potential effects on the housing market and broader financial system.