WASHINGTON — Friday’s call by President Joe Biden to Congress was made to make it easier for Congress to repeal bonuses and stock sales gains that were earned by bank executives in response to the collapse of two banks.
Biden also asked Congress to make it harder for bank executives to get other jobs after the collapse of the institutions they manage. The president also wants Congress to increase the FDIC’s ability for fines to discourage risky behavior that could jeopardize the bank’s health.
Biden stated that the law limits the authority of the administration to hold executives accountable in a prepared statement, released one week after the takeover of Silicon Valley Bank. Regulators should be able to easily recover compensation from executives when banks fail because of mismanagement or excessive risk taking. They can also impose civil penalties and ban executives from the banking industry.
The president stated that Congress must pass tougher sanctions for bank executives whose bad management contributed to the institution’s failure.
Biden’s announcement comes on Monday after a promise he made that the government would take steps to ensure that all those who have deposited money at Signature Bank or Silicon Valley Bank are made whole. Biden stated that he wants accountability for bank executives who have put the country’s financial system at risk and caused bank stocks to plummet.
Biden stated that “No one is above law” and that strengthening accountability was an important deterrent for future mismanagement.