WASHINGTON — President Joe Biden on Friday urged Congress to pass legislation that would give the Federal Deposit Insurance Corporation authority to “claw back” executive pay at failed banks and to bar the executives from jobs in the banking industry.
As the fallout continues from the federal rescue of depositors in Santa Clara, California-based Silicon Valley Bank and New York City-based Signature Bank, Biden said he wants to hold the executives accountable. The executives have already been removed from their positions and the regulators’ rescue of depositors last week doesn’t extend to shareholders or certain unsecured debt holders.
“No one is above the law — and strengthening accountability is an important deterrent to prevent mismanagement in the future,” Biden said in a statement. “The law limits the administration’s authority to hold executives responsible. 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.”
