WASHINGTON – President Joe Biden on Friday called on Congress to pass legislation that would make it easier to strip bonuses and stock sales earned by executives whose actions led to bank failures in response to two recent bank failures.
Biden is also asking Congress to make it tougher for bank executives to replace other jobs in the industry after the failures of the institutions they lead. In another move aimed at curbing risky behavior that threatens bank health, the president wants Congress to expand the FDIC’s ability to fine executives.
“The law limits the administration’s right to hold executives accountable,” Biden said in a statement released a week after the government seized a failed Silicon Valley bank. “When banks fail because of mismanagement and excessive risk-taking, regulators should make it easier to collect compensation from executives, impose civil penalties, and bar executives from ever working in the banking industry again.”
“Congress must act to impose severe penalties on bank executives who cause their institutions to fail,” the president added.
Biden’s announcement followed a promise on Monday that the government would outline steps it would take to make sure those who deposited money into Silicon Valley Bank and Signature Bank were paid in full. He said he wants to hold accountable the executives who put banks at risk, rocked the nation’s financial system and sent bank stocks plummeting.
“No one is above the law — and increased accountability is an important deterrent to future mismanagement,” Biden said.