Biden Says Top Executives of Failed Banks Should Face Harsher Penalties
The president is "rightfully fighting to hold bank executives accountable for their failures," said Sen. Elizabeth Warren.
Days after U.S. Sen. Elizabeth Warren expressed outrage over the bonuses that Silicon Valley Bank executives were handing out hours before the bank failed, President Joe Biden on Friday called on Congress to strengthen regulatory powers to hold officials at failed banks accountable.
The president said in a statement that the White House's authority to hold SVB executives directly responsible for the failure is limited, but said Congress can and should pass legislation granting the Federal Deposit Insurance Corporation (FDIC) broader powers to take action against former SVB CEO Greg Becker and other executives.
He called on lawmakers to allow the FDIC to claw back compensation from executives, impose civil penalties, and bar executives from working in the financial services industry if their banks failed "due to mismanagement and excessive risk taking."
"I'm firmly committed to accountability for those responsible for this mess," said Biden. "No one is above the law—and strengthening accountability is an important deterrent to prevent mismanagement in the future. Congress must act to impose tougher penalties for senior bank executives whose mismanagement contributed to their institutions failing."
SVB and Becker himself raked in significant profits by largely serving wealthy tech companies, and took a risk by holding an "abnormally large ratio of uninsured deposits," as Warren said earlier this week. They also invested a large share of the funds into long-term Treasury bonds whose value plummeted as interest rates rose, causing the bank's clients to withdraw their money only to find SVB did not have sufficient funds on hand.
In addition to giving out bonuses hours before SVB collapsed, Becker sold roughly $3 million worth of shares of the bank in the weeks before the failure.
Biden called for Congress to allow the regulatory agency to penalize executives for "negligent" conduct as well.
"We need to claw back every penny of their unjust pay and bonuses, impose real penalties, and ensure these executives never work in the banking industry again," said the Massachusetts Democrat. "Congress must step up."
We are at a crossroads
This country and this world are at a monumental crossroads. In a few short weeks, US voters will have an opportunity to beat back the forces of fascism and confront the billionaires who are rigging the economy, our media system, and our democracy, making it increasingly impossible for ordinary people to get by. We’re not just talking about the election. We’re talking about what must be done once these fascist elements are vanquished from power. We need a bolder set of solutions than what either major party has so far been willing to offer and a working-class movement ready to fight like hell for it. Trump didn't emerge from nowhere. The conditions that fueled MAGA authoritarianism were created by decades of radical neoliberal economic policies and a corrupt political system dominated by corporate interests. They slashed taxes on the super-rich, promising that the benefits would trickle down. They said giveaways to the corporate titans would make life more affordable for the rest of us. It was all bullshit. And when a bitter, betrayed populace searches for someone to blame, right-wing demagogues have little trouble finding scapegoats. People know when they're being lied to, but you won't hear any of this from the corporate media. Only independent journalism—powered and funded by people who believe in building a better world—can deliver truly trustworthy daily news. Our Fall Campaign is underway, and we need your help. To power our newsroom through the rest of the year, we need to raise $125,000 by midnight on October 31. So if you share our vision, please contribute whatever you can to sustain our work. |
Days after U.S. Sen. Elizabeth Warren expressed outrage over the bonuses that Silicon Valley Bank executives were handing out hours before the bank failed, President Joe Biden on Friday called on Congress to strengthen regulatory powers to hold officials at failed banks accountable.
The president said in a statement that the White House's authority to hold SVB executives directly responsible for the failure is limited, but said Congress can and should pass legislation granting the Federal Deposit Insurance Corporation (FDIC) broader powers to take action against former SVB CEO Greg Becker and other executives.
He called on lawmakers to allow the FDIC to claw back compensation from executives, impose civil penalties, and bar executives from working in the financial services industry if their banks failed "due to mismanagement and excessive risk taking."
"I'm firmly committed to accountability for those responsible for this mess," said Biden. "No one is above the law—and strengthening accountability is an important deterrent to prevent mismanagement in the future. Congress must act to impose tougher penalties for senior bank executives whose mismanagement contributed to their institutions failing."
SVB and Becker himself raked in significant profits by largely serving wealthy tech companies, and took a risk by holding an "abnormally large ratio of uninsured deposits," as Warren said earlier this week. They also invested a large share of the funds into long-term Treasury bonds whose value plummeted as interest rates rose, causing the bank's clients to withdraw their money only to find SVB did not have sufficient funds on hand.
In addition to giving out bonuses hours before SVB collapsed, Becker sold roughly $3 million worth of shares of the bank in the weeks before the failure.
Biden called for Congress to allow the regulatory agency to penalize executives for "negligent" conduct as well.
"We need to claw back every penny of their unjust pay and bonuses, impose real penalties, and ensure these executives never work in the banking industry again," said the Massachusetts Democrat. "Congress must step up."
- Warren Calls for Clawing Back Pay, Bonuses for Silicon Valley Bank Executives ›
- Dems Push Biden DOJ to Probe Possible 'Criminal' Violations by SVB Execs ›
Days after U.S. Sen. Elizabeth Warren expressed outrage over the bonuses that Silicon Valley Bank executives were handing out hours before the bank failed, President Joe Biden on Friday called on Congress to strengthen regulatory powers to hold officials at failed banks accountable.
The president said in a statement that the White House's authority to hold SVB executives directly responsible for the failure is limited, but said Congress can and should pass legislation granting the Federal Deposit Insurance Corporation (FDIC) broader powers to take action against former SVB CEO Greg Becker and other executives.
He called on lawmakers to allow the FDIC to claw back compensation from executives, impose civil penalties, and bar executives from working in the financial services industry if their banks failed "due to mismanagement and excessive risk taking."
"I'm firmly committed to accountability for those responsible for this mess," said Biden. "No one is above the law—and strengthening accountability is an important deterrent to prevent mismanagement in the future. Congress must act to impose tougher penalties for senior bank executives whose mismanagement contributed to their institutions failing."
SVB and Becker himself raked in significant profits by largely serving wealthy tech companies, and took a risk by holding an "abnormally large ratio of uninsured deposits," as Warren said earlier this week. They also invested a large share of the funds into long-term Treasury bonds whose value plummeted as interest rates rose, causing the bank's clients to withdraw their money only to find SVB did not have sufficient funds on hand.
In addition to giving out bonuses hours before SVB collapsed, Becker sold roughly $3 million worth of shares of the bank in the weeks before the failure.
Biden called for Congress to allow the regulatory agency to penalize executives for "negligent" conduct as well.
"We need to claw back every penny of their unjust pay and bonuses, impose real penalties, and ensure these executives never work in the banking industry again," said the Massachusetts Democrat. "Congress must step up."
- Warren Calls for Clawing Back Pay, Bonuses for Silicon Valley Bank Executives ›
- Dems Push Biden DOJ to Probe Possible 'Criminal' Violations by SVB Execs ›