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Biden Calls On Congress To Toughen Penalties On Failed Bank Execs

WHITE HOUSE
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The White House has released a statement (https://www.whitehouse.gov/briefing-room/statement...) in which President Joe Biden in the wake of the SVB and Signature Bank collapses, calls on Congress to make it easier to punish bank executives for mismanagement and claw back compensation.

  • 'The President is calling on Congress to:Expand the FDIC’s authority to claw back compensation – including gains from stock sales – from executives at failed banks like Silicon Valley Bank and Signature Bank'
  • Also calls on Congress to bar such execs from working in banking sector again: "Under existing law, the FDIC can bar executives from holding jobs at other banks if they engage in “willful or continuing disregard for the safety and soundness” of their bank. Congress should strengthen this tool by lowering the legal standard for imposing this prohibition when a bank is put into FDIC receivership."
  • Biden faces major political risks from the current upheaval in the banking sector. While the FDIC Deposit Insurance Fund is paid out by premiums paid by banks, there is a risk - exacerbated by GOP rhetoric - that these banks are being 'bailed out' at taxpayers' expense. The banking bailouts of the Global Financial Crisis caused a major public backlash against mainstream politicians and contributed to rising populism, with statements such as Biden's today attempting to put clear blue water between his administration and those failed banks.
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The White House has released a statement (https://www.whitehouse.gov/briefing-room/statement...) in which President Joe Biden in the wake of the SVB and Signature Bank collapses, calls on Congress to make it easier to punish bank executives for mismanagement and claw back compensation.

  • 'The President is calling on Congress to:Expand the FDIC’s authority to claw back compensation – including gains from stock sales – from executives at failed banks like Silicon Valley Bank and Signature Bank'
  • Also calls on Congress to bar such execs from working in banking sector again: "Under existing law, the FDIC can bar executives from holding jobs at other banks if they engage in “willful or continuing disregard for the safety and soundness” of their bank. Congress should strengthen this tool by lowering the legal standard for imposing this prohibition when a bank is put into FDIC receivership."
  • Biden faces major political risks from the current upheaval in the banking sector. While the FDIC Deposit Insurance Fund is paid out by premiums paid by banks, there is a risk - exacerbated by GOP rhetoric - that these banks are being 'bailed out' at taxpayers' expense. The banking bailouts of the Global Financial Crisis caused a major public backlash against mainstream politicians and contributed to rising populism, with statements such as Biden's today attempting to put clear blue water between his administration and those failed banks.