President Joe Biden on Friday referred to as on Congress to make it simpler for regulators to punish executives at failed banks ― together with by taking their bonuses away.
Biden stated federal legislation prevented his administration from holding banks accountable.
“When banks fail as a consequence of mismanagement and extreme threat taking, it needs to be simpler for regulators to claw again compensation from executives, to impose civil penalties, and to ban executives from working within the banking business once more,” Biden stated in a press release.
Biden’s proposal follows the federal takeover of Silicon Valley Financial institution in California after it was unable to honor withdrawal requests from depositors final week. Federal businesses additionally shut down Signature Financial institution in New York and took the dramatic step of guaranteeing all deposits on the two banks, regardless of lots of their values drastically exceeding the $250,000 coated by federal deposit insurance coverage.
The strikes had been designed to forestall depositors at different regional banks from yanking out their cash in a panic, and the administration’s swift motion drew reward from Republicans and Democrats alike on Capitol Hill.
However some members of Congress questioned why tech business prospects of Silicon Valley Financial institution needs to be bailed out by the federal government, even when the prices are coated by charges on different banks.
Biden’s announcement on Friday places the ball again in lawmakers’ courtroom.
“Congress should act to impose harder penalties for senior financial institution executives whose mismanagement contributed to their establishments failing,” he stated.
This can be a creating story. Please verify again for updates.
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