Biden Desires Congress to Tighten Govt Penalties for Financial institution Failures: NPR
President Biden on Friday known as on Congress to go laws to extend penalties for financial institution executives when mismanagement causes a financial institution to fail.
“When banks fail on account of mismanagement and extreme danger, it must be simpler for regulators to hunt compensation from executives, impose civil sanctions and once more ban executives from banking,” Biden mentioned in an announcement.
Over the weekend, regulators moved to ensure deposits at Silicon Valley Financial institution and Signature Financial institution, utilizing charges paid by banks as assist. Biden vowed to carry individuals accountable for the financial institution’s failure. However on Friday, he mentioned the present regulation limits his administration’s energy to carry executives accountable.
High managers of banks have been fired. However on Friday, Biden mentioned the present regulation limits his administration’s energy to carry executives accountable for these sorts of occasions.
For instance, Biden desires Congress to make it simpler for the Federal Deposit Insurance coverage Company (FDIC) to hunt compensation from midsize banks. At the moment, the FDIC solely has this proper for giant Wall Avenue banks. The White Home famous stories that the CEO of Silicon Valley Financial institution offered $3 million price of inventory earlier than the financial institution went bankrupt.
“Nobody is above the regulation, and strengthening accountability is a vital deterrent to stop future mismanagement,” Biden mentioned in an announcement.