Biden asks Congress to crack down on executives at failed banks

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Washington – President Biden on Friday called on Congress to give his administration the authority to impose tougher penalties on senior bank executives found to have mismanaged multiple lending institutions. Recent bank failures The industry continues to shake up.

Specifically, the president is asking lawmakers to expand the Federal Deposit Insurance Corporation’s (FDIC) powers to recover compensation from executives of failed banks, including profits from stock sales. Silicon Valley Bank and the signature bank. He also wants to improve the FDIC’s ability to prevent executives from keeping jobs in the banking industry when their banks enter receivership and expand the FDIC’s ability to bring penalties against executives of failed banks.

“The law limits the administration’s authority to hold officials accountable,” Mr. Biden said in a statement. “When banks fail because of mismanagement and excessive risk-taking, it should be easier for regulators to recover compensation from executives, impose civil penalties, and ban executives from ever working in the banking industry again. Senior bank executives whose mismanagement contributed to the failure of their institutions.”

A White House summary of the president’s request to Congress said Mr. Biden is willing to work with lawmakers to strengthen accountability in those three areas, and any other areas members can identify. .

The White House pointed to a report that the CEO of a Silicon Valley bank sold more than $3 million in shares just days before running the bank, prompting California regulators to seize the bank and hand control over to the FDIC. What did The White House specifically wants Congress to address such matters.

The White House said that under current law, the FDIC can prevent executives from holding jobs at other banks, but only if they show “willful or persistent disregard for the safety and soundness” of the bank. I’m involved. The president thinks it should extend to all leaders of failed banks, not just those who willfully act against the bank’s interests. Finally, the president wants to ensure that the FDIC can fine executives of failed banks who were merely negligent.

The Department of Justice has An investigation has been launched In the Silicon Valley bank failure, law enforcement officials previously told CBS News.

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