Biden calls on Congress to tighten rules to reclaim executive pay and impose fines in bank failures

President Joe Biden called on Congress to give regulators more power to recover wages and punish executives at ailing banks “whose mismanagement contributed to the failure of their institutions.”

“No one is above the law — and strengthening accountability is an important deterrent to preventing mismanagement in the future,” Biden said in a statement Friday. “If banks fail due to mismanagement and excessive risk taking, it should be easier for regulators to recover executive compensation, impose civil fines and ban executives from working in the banking industry again.”

Biden noted that his powers to hold executives accountable were limited by law and asked Congress to intervene.

“Congress must act to impose tougher penalties on senior bank executives whose mismanagement has contributed to the failure of their institutions,” Biden said.

The country’s top banking regulators announced on Sunday that the Federal Deposit Insurance Corp. and the Federal Reserve will fully cover deposits at both failed banks, Silicon Valley Bank and Signature Bank, relying on Wall Street and major financial institutions – not taxpayers – to foot the bill. . Signature Bank in New York, which closed on Sunday over similar systemic contagion fears as SVB, has been a popular source of funding for cryptocurrency companies.

The president stressed that the measures taken over the weekend were necessary to prevent further economic fallout, but that no taxpayer money was used.

“Our banking system is more resilient and stable today due to the actions we have taken,” Biden said. “On Monday morning, I told the American people and American businesses that they should be confident that their deposits will be there if and when they need them. They will continue to be.”