"No one is above the law," Biden said in the statement, "and
strengthening accountability is an important deterrent to
prevent mismanagement in the future."
The current law "limits the administration’s authority to hold
executives responsible," he said.
Specifically, Biden is asking Congress to give the Federal
Depository Insurance Corp greater authority to claw back
compensation, "including gains from stock sales – from
executives at failed banks like Silicon Valley Bank and
Signature Bank," the White House said in a second statement.
Silicon Valley Bank CEO Greg Becker sold $3.6 million worth of
shares in late February, about two weeks before the bank entered
FDIC receivership, Bloomberg and CNBC reported.
"The President urges Congress to expand the FDIC’s authorities
to expressly cover cases like this" the White House statement
said, citing Becker's stock sales.
The president is also asking Congress to give the FDIC more
authority to ban bank executives from the industry when their
banks go into receivership, and to fine bank managers whose
banks fail.
Currently, the FDIC is limited to clawing back executive pay
only if one of the nation's largest institutions were to fail,
and can only bar executives from the industry if they were found
to be engaging in "willful and continuing disregard" in running
a bank safely.
Separately, the 2010 Dodd-Frank financial reform law also
directed regulators to draft new rules aimed at ensuring banker
pay packages do not encourage them to take on unnecessary risk.
But that multiagency effort has been stalled for years.
Democrats who have been calling for tougher banking regulation
were quick to hail Biden's statement, but it is unclear whether
it has bipartisan support in Congress.
"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," Democratic Senator
Elizabeth Warren said.
(Reporting by Jeff Mason and Costas Pitas; writing by Susan
Heavey and Heather Timmons; Editing by Chizu Nomiyama and Chris
Reese)
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