Washington (EFE).- The president of the United States, Joe Biden, asked Congress this Friday to tighten sanctions and controls against bank executives, making it clear after the recent collapses of Silicon Valley Bank (SVB), Signature Bank and the First Republic Bank that “no one is above the law.”
“When banks fail due to mismanagement and excessive risk-taking, it should be easier for regulators to recover executive pay, impose civil penalties and ban them from ever working in the banking industry again,” he said.
Congress, he added in his statement, “must act to impose tougher penalties on senior bank executives whose mismanagement has contributed to the bankruptcy of their institutions.”
His statement comes after a week of banking uncertainty in the country due to the fall and subsequent intervention of the SVB and Signature Bank by the authorities and the rescue this Thursday of the First Republic Bank by the main banking corporations, with an injection of 30,000 million dollars.
Senior executives must be held accountable
Biden recalled that the Federal Deposit Insurance Corporation (FDIC), the Department of Justice and the Securities and Exchange Commission (SEC) have regulatory power to investigate the circumstances that led the SVB and Signature to enter bankruptcy, and to take action against your address as appropriate.
But he stressed that Congress “can and should do more” to hold top executives of such corporations to account.
To this effect, Biden called for expanding the FDIC’s authority to recover pay, including proceeds from the sale of shares, from the heads of failed banks such as the SVB and Signature Bank.
He also called for strengthening the FDIC’s power to bar executives from holding jobs in the banking sector when their banks go into receivership. “If you are responsible for the failure of one bank, you should not be able to turn around and run another,” the White House statement said.
The Democratic president also expressed his intention to expand the authority of that Federal Corporation to impose fines on bankrupt bank executives when their actions have led to that situation.
Silicon Valley Bank Financial Group, the parent company of the ill-fated SVB, filed for bankruptcy in a New York court on Friday to attempt a capital restructuring, under judicial supervision, of the businesses that have been seized by the authorities.