Business|Biden Asks Congress for New Tools to Target Executives of Failed Banks
The petition is simply a effect to the national rescue of Silicon Valley Bank and Signature Bank, and it seeks to enforce caller fines and different penalties.
March 17, 2023, 11:52 a.m. ET
WASHINGTON — President Biden asked Congress connected Friday to walk authorities to springiness fiscal regulators wide caller powers to claw backmost ill-gotten gains from the executives of failed banks and enforce fines for failures.
The proposal, a effect to the national rescue of Silicon Valley Bank and Signature Bank past week, would besides question to barroom executives astatine failed banks from taking different jobs successful the fiscal industry.
The measures contained successful Mr. Biden’s program would physique connected existing regulatory powers held by the Federal Deposit Insurance Corporation.
“Strengthening accountability is an important deterrent to forestall mismanagement successful the future,” Mr. Biden said successful a connection released by the White House.
“When banks neglect owed to mismanagement and excessive hazard taking, it should beryllium easier for regulators to claw backmost compensation from executives, to enforce civilian penalties, and to prohibition executives from moving successful the banking manufacture again,” helium said, adding that Congress would person to walk authorities to marque that possible.
“The instrumentality limits the administration’s authorization to clasp executives responsible,” helium said.
One plank of the connection would broaden the F.D.I.C.’s quality to question the instrumentality of compensation from executives of failed banks, successful effect to reports that the main enforcement of Silicon Valley Bank sold $3 cardinal successful shares of the slope soon earlier it was taken implicit by national regulators a week ago. Regulators’ existent clawback powers are constricted to the largest banks; Mr. Biden would grow them to screen banks the size of Signature and Silicon Valley Bank.
The president is besides asking Congress to little a ineligible barroom that the F.D.I.C. indispensable wide successful bid to barroom an enforcement from a failed slope from moving elsewhere successful the fiscal industry. That quality presently applies lone to executives who prosecute successful “willful oregon continuing disregard for the information and soundness” of their institutions. He is likewise seeking to broaden the agency’s quality to enforce fines connected executives whose actions lend to the nonaccomplishment of their banks.
The proposals look an uncertain aboriginal successful Congress. Republicans power the House and person opposed different pushes by Mr. Biden to fortify national regulations. A 2018 instrumentality to rotation backmost immoderate of the regulations connected banking that were approved aft the 2008 fiscal situation passed the House and Senate with bipartisan support.