SBNY - President Biden urges Congress to impose stiffer penalties on execs of failed banks

2023-03-17 14:43:12 ET

President Joe Biden urged Congress on Friday to impose stiffer penalties for senior banking executives when their mismanagement contribute to their institutions' failing.

"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," he said in a statement.

Earlier this week, the federal government took actions to stabilize the banking system. The Federal Deposit Insurance Corp. said all depositors at failed banks Silicon Valley Bank ( SIVB ) and Signature Bank ( SBNY ) would get full access to their deposits on Monday, even those that weren't insured. In addtion, the Federal Reserve formed a new lending facility that provides increased liquidity for banks.

Biden also said he's "firmly committed to accountability for those responsible for this mess. No one is above the law — and strengthening accountability is an important deterrent to prevent mismanagement in the future."

Specifically, the president wants Congress to expand the FDIC's authority to make it easier to claw back compensation from executives at failed banks, to bar those executive from ever working in the banking industry when their banks enter receivership, and to fine those executivies.

For more coverage on the recent banking turmoil:

First Republic gets $30B in deposits from largest U.S. banks

SVB Financial’s Silicon Valley Bank fails as FDIC takes over

Signature Bank taken over by New York Department of Financial Services

SVB Financial files for Chapter 11 bankruptcy protection

Worried About Your Bank? Here's How To Put Your Money Somewhere Safer And Earn Interest

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