Treasury Secretary Scott Bessent arrived at the G20 Finance Ministers and Central Bank Governors meeting in Asheville, North Carolina with a clear message: the regulatory architecture built after the 2008 financial crisis has, over time, done more damage to small banks than it has protected them.
The meeting, held August 31 through September 1 under the U.S. G20 presidency, gave Bessent a global audience for an argument that has been building inside the current administration for months.
The shrinking small bank problem
Bessent’s central exhibit was a number that tends to get buried in broader financial policy debates: since 2010, the U.S. has lost more than 3,600 small and community banks. That figure represents roughly half of the total that existed before the post-crisis regulatory wave took hold.
The culprit, in Bessent’s telling, is the compliance burden that followed the Dodd-Frank Act. Large banks had the legal teams, the back-office infrastructure, and the capital reserves to absorb new requirements. Smaller institutions, the ones lending to the hardware store owner and the local contractor, largely did not.
Bessent argued that easing capital requirements for community banks could release tens of billions in capital directly into small business lending.
A G20 stage, a private-sector twist
One of the more notable features of the Asheville meeting was who was in the room. Senior executives from institutions including JPMorgan and Goldman Sachs participated in the discussions, a departure from the traditionally government-only composition of G20 finance sessions.
Bessent used the forum to connect the deregulation argument to the G20’s founding mission. The group was created in the aftermath of the late-1990s emerging market crises and was elevated to leaders-level status after 2008, with a mandate centered on coordinating economic policy to support global growth.
He also pointed to the bank failures of 2023, including the collapse of Silicon Valley Bank, as evidence that heavy supervision did not deliver the stability it promised.
The Asheville location carried its own symbolism. Western North Carolina was hit hard by Hurricane Helene, and the region’s recovery remained a backdrop to discussions about economic revitalization. The U.S. G20 presidency has framed regulatory modernization, public-private partnerships, and economic recovery as interconnected priorities.