U.S. President Joe Biden, in the wake of the Silicon Valley Bank (SVB) collapse, is calling upon members of Congress to take action to “strengthen accountability” for senior bank executives.
Biden made the call in a statement that the White House released on Friday, Mar. 17.
“[T]he President believes Congress can and should do more to hold senior bank executives accountable,” the statement reads.
It continues, “Congress must take action to strengthen the ability of the federal government to hold senior management accountable when their banks fail and enter FDIC [Federal Deposit Insurance Corporation] receivership.”
In the remainder of the press release, the White House goes on to list specific actions that Biden would like to see members of Congress take in order to “strengthen accountability” for senior bank executives.
Biden, for one, is calling upon Congress to “expand the FDIC’s authority to claw back compensation – including gains from stock sales – from executives at failed banks like Silicon Valley Bank and Signature Bank.”
Specifically, Biden wants to see the FDIC’s “clawback authority” under the Dodd-Frank Act be extended such that the FDIC would also be able to exercise such authority over banks such as SVB.
Biden, next, calls upon Congress to “strengthen the FDIC’s authority to bar executives from holding jobs in the banking industry when their banks enter receivership.”
Finally, Biden calls for Congress to “expand the FDIC’s authority to bring fines against executives of failed banks,” specifically against “negligent executives of failed banks when their actions contribute to the failure of their firms.”
This all comes after the SVB collapsed and was taken over by the FDIC.
It was the largest collapse in U.S. history since the collapse of Washington Mutual in 2008. And, overall, the SVB collapse was the second-largest collapse in U.S. history.
The federal government – through the Federal Reserve, Treasury Department, and FDIC – has taken steps to try to stabilize the situation and avoid further fallout from the collapse. This includes allowing SVB customers to access their funds.
Meanwhile, Biden is calling for “accountability for those responsible” for the collapse. Biden, in a statement of his own on Friday, said:
I’m 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.
It remains to be seen whether members of Congress will heed Biden’s call to “strengthen accountability.”