WASHINGTON — President Joe Biden called on Congress Friday to pass legislation that would make it easier for the government to rescind bonuses and stock gains collected by executives whose actions lead to bank failures, in response to the recent collapse of two banks.
Biden is also calling on Congress to make it harder for bank executives to get other jobs in the industry after the failure of the institutions they lead. In another move aimed at deterring risky actions that endanger a bank’s health, the president wants Congress to expand the FDIC’s ability to fine executives.
“The law limits the authority of the administration to hold executives accountable,” Biden said in a prepared statement released a 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 recover executive compensation, impose civil penalties, and bar executives from ever working in the banking industry again.”
«Congress must act to impose tougher penalties on top bank executives whose mismanagement contributed to the bankruptcy of their institutions,» added the president.
Biden’s announcement follows a promise he made Monday outlining steps the government would take to make sure those who deposited money at Silicon Valley Bank and Signature Bank get back on their feet. He said he wanted the accountability of executives who put banks at risk, rocking the nation’s financial system and causing bank shares to plummet.
“No one is above the law, and strengthening accountability is a major deterrent to future mismanagement,” Biden said.