Biden Calls for Legislation to Make it Easier to Punish Bank Executives for Reckless Behavior

President Joe Biden on Friday called on Congress to pass legislation that would make it easier for the government to punish executives at failed banks, in response to the recent collapse of two banks.

The president’s policy would make it easier for regulators to claw back compensation from executives, impose civil penalties, and ban executives from working in the banking industry again. Biden also wants Congress to expand the FDIC’s ability to fine executives and make it tougher for banking executives to land other jobs in the industry after the failure of institutions they lead.

The proposals address misconduct coming from wayward bank executives, and follow the federal takeover of Silicon Valley Bank in California after it was unable to honor withdrawal requests from depositors last week.

The president’s policy is meant to deter risky actions that jeopardize a bank’s health, and to ensure that executives are held accountable for their actions.

“When banks fail due to mismanagement and excessive risk taking, it should be easier for regulators to hold executives accountable,” Biden said in a statement. “We must ensure that executives are not rewarded for recklessness, and that taxpayers are not left footing the bill for their mistakes.”

The president’s proposals are part of a larger effort to protect taxpayers and strengthen the banking system. If passed, the legislation would provide greater oversight and accountability for banking executives, and help to ensure that banks remain stable and secure.