‘Congress must act’: Biden on holding bank execs accountable

  • President Joe Biden said Congress should do more to hold bank execs accountable
  • Biden said it should be easier to claw back compensation and impose civil penalties
  • Under current law, the FDIC has limited ability to claw back any compensation

President Joe Biden speaks about the banking system in the Roosevelt Room of the White House, Monday, March 13, 2023 in Washington.

(NewsNation) — President Joe Biden said Congress can and should do more to hold senior bank executives accountable following the failure of two banks last week, according to a statement released Friday.

“I’m firmly committed to accountability for those responsible for this mess,” the statement from the president read. “No one is above the law – and strengthening accountability is an important deterrent to prevent mismanagement in the future.”

In the statement, Biden said the law limits the administration’s authority to hold executives responsible, saying it should be easier to do so and Congress must act.

Biden said Congress must take action to strengthen the ability of the federal government to hold senior management accountable when their banks fail and enter FDIC receivership.

“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,” the statement said. “Congress must act to impose tougher penalties for senior bank executives whose mismanagement contributed to their institutions failing.”

Under current law, the FDIC has limited ability to claw back any compensation or gains from share sales that senior executives may have received shortly before their banks entered FDIC receivership.

The United States government stepped in after the historic failures of Silicon Valley Bank and Signature Bank — the second- and third-largest bank failures in U.S. history.

Critics had condemned the White House’s resolution to protect bankers’ deposits after the banks failed, calling the solution a bailout at the taxpayers’ expense.

“We took decisive action to stabilize the banking system without putting taxpayer dollars at risk,” the statement from the president said. “That action was necessary to protect jobs and small businesses, and no losses will be borne by the taxpayers.”

In the statement, Biden said, “Our banking system is more resilient and stable today because of the actions we took. On Monday morning, I told the American people and American businesses that they should feel confident that their deposits will be there if and when they need them. That continues to be the case.”


© 1998 - 2023 Nexstar Media Inc. | All Rights Reserved.

Trending on NewsNation