Biden wants the Federal Deposit Insurance Corporation to be able to force the return of compensation paid to executives at a broader range of banks should they fail.
WASHINGTON — President Joe Biden on Friday called on Congress to allow regulators to impose tougher penalties on the executives of failed banks, including clawing back compensation and making it easier to bar them from working in the industry.
“Strengthening accountability is an important deterrent to prevent mismanagement in the future,” Biden said in a statement. “Congress must act to impose tougher penalties for senior bank executives whose mismanagement contributed to their institutions failing.” Additionally, a group of Senate Democrats on Thursday introduced the Deliver Executive Profits on Seized Institutions to Taxpayers Act, which would claw back profits made by bank executives on the sale of stocks and compensation bonuses earned within 60 days of a bank failure, among other things.
The shuttering of Silicon Valley Bank on March 10 and of New York’s Signature Bank two days later has revived bad memories of the financial crisis that plunged the United States into the Great Recession about 15 years ago. “That includes holding accountable the executives who ran this bank into the ground and the regulators tasked with overseeing them, and it includes working to reform our laws to better protect workers, small businesses, and taxpayers from corporate greed.”
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