FILE PHOTO: U.S. Treasury Secretary Scott Bessent speaks to reporters at the White House in Washington, D.C., U.S., November 5, 2025. REUTERS/Kevin Lamarque/File Photo

By Pete Schroeder

WASHINGTON, Dec 11 (Reuters) - The Trump administration is overhauling a government watchdog charged with monitoring risks to the financial system to focus more on ways to boost economic growth and the "undue burdens" imposed by strict financial rules, Treasury Secretary Scott Bessent announced on Thursday.

Bessent said the Financial Stability Oversight Council, a panel he chairs that was created following the 2008 financial crisis, will shift its focus towards ways to ease financial rules, arguing the costs of regulations to economic growth constitute a risk themselves.

As part of that effort, Bessent said the FSOC will establish working groups focused on market and household resilience, as well as a working group to explore the opportunities and risks posed by artificial intelligence. Bessent announced the changes on the social media platform X, ahead of a meeting of the FSOC that he is scheduled to chair Thursday afternoon.

The FSOC gathers the leaders of all the major financial regulatory agencies across the federal government, and is charged with policing broad threats to the financial system.

Bessent's plan is in line with the Trump administration's overall goal of trimming regulations to spur economic growth, as FSOC now will work with regulatory agencies to identify rules that may "impose undue burdens and negatively impact economic growth, thereby undermining financial stability."

As part of that effort, Bessent said the group's new market resilience working group will focus on Treasury and other key financial markets, with a focus on whether any rules have "distorted or imposed undue costs on these critical markets." The household resilience working group will monitor for potential stress on household finances, including credit access and developments in the housing market.

The AI working group will be charged with exploring how AI could boost the financial system's resilience, but also how the new technology could pose potential risks to financial stability. It also will look for ways regulators could integrate AI into their own work to make them more efficient, while inviting feedback on "regulatory impediments" to adopting the technology in the financial sector.

(Reporting by Pete Schroeder; Editing by Paul Simao)