Biden urges Congress to crack down on failed bank executives

Washington — President Biden asked Congress on Friday to give the administration the power to impose tougher penalties on bank executives who mismanage lending institutions, citing influence from multiple financial institutions. recent bank failure It continues to shake up the industry.

Specifically, the president is asking lawmakers to expand the authority of the Federal Deposit Insurance Corporation (FDIC) to collect compensation from failed bank executives, including gains from stock sales. Silicon Valley Bank and signature bank. He also improved the FDIC’s ability to bar executives from retaining jobs in the banking industry if a bank entered receivership, and expanded the FDIC’s ability to fine executives of failed banks. I want to

“The law limits the administration’s ability to hold executives accountable,” Mr. Biden said in a statement. “If a bank fails because of mismanagement and excessive risk-taking, it will be easier for regulators to recover compensation from executives, impose civil penalties, and bar executives from working in the banking industry again. Congress must act to impose harsher penalties on senior bank executives whose poor management led to the bankruptcy of the institution.”

Biden is keen to work with lawmakers to increase accountability in these three areas, as well as other areas lawmakers can identify, according to the White House summary of the president’s demands to Congress. strengthen the

The White House reports that the CEO of Silicon Valley Bank sold more than $3 million in stock just days before the bank’s bank run prompted California regulators to seize the bank and hand over control to the FDIC. pointed out. The White House specifically wants Congress to deal with such cases.

Under current law, the FDIC can prohibit executives from working for other banks, but only if the executive “willfully or persistently disregards the safety and soundness” of the bank. said the White House. The President believes this should be extended to all leaders of failed banks, not just those who knowingly act against the interests of the banks. We want to be able to fine bank executives.

The Department of Justice started an investigation Law enforcement officials previously told CBS News about the Silicon Valley Bank collapse.