WASHINGTON – President Joe Biden called on Congress on Friday to pass legislation that would make it easier for the government to void bonuses and stock sale gains collected by executives in response to the recent collapse of two banks.
Biden is also asking Congress to make it harder for banking executives to land other jobs in the industry following the failure of the institutions. In another move to prevent risky actions that threaten the health of banks, the president wants Congress to expand the FDIC’s ability to recover funds.
“The law limits the administration’s authority to hold officials 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 withhold compensation from executives, impose civil penalties, and bar executives from ever working in the banking industry again.”
The president said, “Congress must act to impose tougher penalties for senior bank executives whose mismanagement contributed to the failure of their institutions.”
Biden’s announcement follows a pledge he made on Monday that the government would take steps to ensure that those depositing money at Silicon Valley Bank and Signature Bank would be met. They said they wanted accountability for the officials who put banks at risk, shook up the country’s financial system and sent bank stocks plummeting.
“No one is above the law – and strengthening accountability is an important deterrent to prevent future mismanagement,” Biden said.