SVB collapse: Biden calls for harsher penalties on banking executives
Haisten Willis
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President Joe Biden on Friday called for harsher penalties for banking executives in the wake of Silicon Valley Bank‘s collapse.
While acknowledging he is limited in what he can do under existing law, the president called on Congress to step up punishment for the leaders of failed banks.
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“I’m firmly committed to accountability for those responsible for this mess,” the president said in a statement. “No one is above the law — and strengthening accountability is an important deterrent to prevent mismanagement in the future.”
But action from the legislative branch will be needed in order for it to happen, and Biden called on Congress to do just that.
“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. Congress must act to impose tougher penalties for senior bank executives whose mismanagement contributed to their institutions failing,” he said.
The president and top Democrats have been in favor of new laws and more banking regulations since SVB failed one week ago. The California bank’s collapse has the entire banking system teetering, with drastic actions being taken in both the public and private sectors to stabilize the situation.
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Biden defended the choice to guarantee bank deposits fully at SVB and stressed that the banking system is stable even while calling for stricter regulations.
“This week, we took decisive action to stabilize the banking system without putting taxpayer dollars at risk,” the president said. “That action was necessary to protect jobs and small businesses, and no losses will be borne by the taxpayers. Our banking system is more resilient and stable today because of the actions we took. On Monday morning, I told the American people and American businesses that they should feel confident that their deposits will be there if and when they need them. That continues to be the case.”