Biden calls on Congress to tighten rules to claw back executive pay, levy penalties in bank failures
U.S. President Joe Biden delivers remarks on the Boys and Women Membership of West San Gabriel Valley on March 14, 2023 in Monterey Park, California.
Mario Tama | Getty Photographs
President Joe Biden referred to as on Congress to provide regulators extra authority to claw again pay and penalize executives at distressed banks “whose mismanagement contributed to their establishments failing.”
“Nobody is above the legislation – and strengthening accountability is a crucial deterrent to forestall mismanagement sooner or later,” Biden mentioned in a press release Friday. “When banks fail on account of mismanagement and extreme danger taking, it needs to be simpler for regulators to claw again compensation from executives, to impose civil penalties, and to ban executives from working within the banking trade once more.”
Biden famous his powers to carry executives accountable had been constrained by the legislation and requested Congress step in.
“Congress should act to impose harder penalties for senior financial institution executives whose mismanagement contributed to their establishments failing,” Biden mentioned.
The nation’s prime financial institution regulators on Sunday introduced the Federal Deposit Insurance coverage Corp. and Federal Reserve would absolutely cowl deposits at each failed banks, Silicon Valley Financial institution and Signature Financial institution, and depend on Wall Avenue and enormous monetary establishments — not taxpayers — to foot the invoice. Signature Financial institution in New York, which was shuttered Sunday over comparable systemic contagion fears as SVB, had been a preferred funding supply for cryptocurrency corporations.
The president confused the actions taken over the weekend had been crucial to forestall additional financial fallout however didn’t use taxpayer funds.
“Our banking system is extra resilient and secure right now due to the actions we took,” Biden mentioned. “On Monday morning, I advised the American individuals and American companies that they need to really feel assured that their deposits shall be there if and after they want them. That continues to be the case. “