Trump Team Reportedly Moves To Slash Staff At Post-2008 Financial Risk Watchdog — Elizabeth Warren Warns It Could Cause 'Another Crash'

The Treasury Department, led by Secretary Scott Bessent, is reportedly moving to drastically downsize the Office of Financial Research, a key agency created to monitor systemic risks following the 2008 financial crisis, drawing fierce pushback from Democrats. Deep Cuts Amid Market Turmoil According to a report from Politico, internal documents reveal the Donald Trump administration has initiated plans to eliminate up to 63% of the research office's staff, bringing the headcount from nearly 200 full-time employees in 2025 down to roughly 70. The reorganization, which includes a $25 million operating budget cut for this fiscal year, will result in significant layoffs beginning May 15. The Treasury Department did not immediately respond to Benzinga’s request for comment. The dismantling of the data hub coincides with growing concerns on Wall Street over instability in private credit markets. Several major private credit funds have recently moved to limit investor withdrawals. Elizabeth Warren Blasts Treasury The timing of the cuts has sparked outrage from Democratic lawmakers. Sen. Elizabeth Warren (D-Mass.) fiercely criticized the restructuring, explicitly warning of the potential consequences. She told Politico that as the risks emerge in the financial system and cracks in credit markets spread, the Trump Administration is “gutting the office designed to evaluate financial risks in a giveaway to Wall Street.” She added that this is just the latest move by President Trump and his financial regulators to “undermine financial stability and pave the way for another crash." As Warren speaks about another crash, the U.S. markets are already underperforming in 2026. The S&P 500 index has declined 4.02% year-to-date. Similarly, the Nasdaq Composite index was down 5.84%, and the Dow Jones tumbled 3.88% YTD. However, the SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 and Nasdaq 100 indices, respectively, closed higher on Thursday. The SPY was up 0.090% at $655.83, while the QQQ advanced 0.11% to $584.98. A Shift in Treasury’s Focus Despite the drastic reduction in workforce and budget, the administration defends the restructuring. A Treasury spokesperson said that the Office of Financial Research will be “appropriately staffed” to perform its duties to support the Financial Stability Oversight Council and its member agencies. Background on the Watchdog Funded by fees from large financial institutions, the research office was established under the Dodd-Frank Act. Its primary duty is to collect data and identify hidden risks across both regulated and less-regulated corners of the financial system. Republicans have historically criticized the agency as a duplicative waste of money with overly expansive data-gathering powers. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Image Credit: THOMAS CORDY/THE PALM BEACH POST / USA TODAY NETWORK via Imagn Images