WASHINGTON — President Joe Biden on Friday called on Congress to pass legislation that would make it easier for the government to rescind bonuses and stock sale gains collected by executives whose actions cause bank failures, in a response to the recent collapse of two banks.
Biden is also asking Congress to make it tougher for banking executives to land other jobs in the industry after the failure of institutions they lead. In another move meant to deter risky actions that jeopardize a bank’s health, the president wants Congress to expand the FDIC’s ability to fine executives.
“The law limits the administration’s authority to hold executives responsible,” Biden said in a prepared statement released one week after the government took over the failed Silicon Valley Bank. “When banks fail due to mismanagement and excessive risk taking, it should be easier for regulators to claw back compensation from executives, to impose civil penalties, and to ban executives from working in the banking industry again.”
“Congress must act to impose tougher penalties for senior bank executives whose mismanagement contributed to their institutions failing,” the president added.
Biden’s announcement follows a pledge he made Monday laying out the steps the government would take to make sure that those who deposited money at Silicon Valley Bank and Signature Bank would be made whole. He said that he wanted accountability for executives who put the banks at risk, rattling the nation’s financial system and causing bank stocks to fall.
“No one is above the law — and strengthening accountability is an important deterrent to prevent mismanagement in the future,” Biden said.