A key response to the 2008 financial crisis was setting up a super-group of regulators to protect the economy from another disastrous crash. But in the Trump era, flagging new dangers has taken a backseat to cutting constraints on business.

The latest blow came Wednesday when the Financial Stability Oversight Council said it no long considered Prudential Financial Inc. so big and complex that the insurer’s failure could trigger a panic.

Prudential was the last non-bank to carry the regulator’s dreaded systemic-risk label, which brings tough oversight and steep compliance costs. When Congress created FSOC through the Dodd-Frank Act, many on Capitol Hill and Wall Street expected it to impose the tag on a number of hedge funds, private-equity firms and insurers. Instead, the watchdog is retreating.

Since officials picked by President Donald Trump took the reins, the group has been more focused on making it easier for companies to escape the government’s grip than examining whether additional firms should be tapped. With such an agenda, it seems unlikely that any non-bank giants -- such as Berkshire Hathaway Inc. or BlackRock Inc. -- will be declared systemically important financial institutions anytime soon.

“They made it clear that they didn’t want to designate anyone,” said Marcus Stanley, policy director at Americans for Financial For Financial Reform in Washington.

Despite FSOC’s reluctance, Wall Street retains plenty of systemic-risk labels. That’s because Dodd-Frank automatically slapped JPMorgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc. and other huge lenders with aggressive Fed supervision and stiff capital rules.

Yet the hesitancy to subject non-banks to added scrutiny comes at a potentially fraught time. Former Federal Reserve Chair Janet Yellen is among those who have raised concerns that some of the riskiest financing of highly indebted companies is being done outside the traditional banking sector. And private-equity firms have seized an increasing share of the lending market.

FSOC members include the heads of the Treasury Department, Fed and Securities and Exchange Commission. Treasury Secretary Steven Mnuchin, who leads the panel, said in a Wednesday statement that the Prudential decision shows “the council has continued to act decisively to remove any designation that is not warranted.” He added that regulators conducted a detailed analysis verifying that the insurer didn’t pose a “significant risk” to financial stability.

Prudential added that it shouldn’t have been labeled a threat in the first place, issuing a statement that said it “never met the standard for designation.”

Other companies have made similar arguments, claiming the process was opaque, inconsistent and even political.

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