(MENAFN) President Biden has called on Congress to grant his administration the authority to impose stricter penalties on senior bank executives who mismanage lending institutions. This comes as several recent bank failures continue to rattle the industry. The President specifically requested that the Federal Deposit Insurance Corporation's (FDIC) authority to recover compensation, including gains from stock sales, from executives at failed banks like Silicon Valley Bank and Signature Bank be expanded. He also wants to improve the FDIC's ability to bar executives from holding jobs in the banking industry when their banks enter receivership and to expand the FDIC's ability to bring fines against the executives of failed banks.
According to a White House summary of the president's request to Congress, Mr. Biden is eager to work with lawmakers to strengthen accountability in these three areas and in any other areas members can identify. The president is calling for tougher penalties for senior bank executives whose mismanagement contributed to their institutions failing.
In a statement, Mr. Biden explained that the law limits the administration's authority to hold executives responsible. He believes that 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.
The President's request for expanded FDIC authority comes as the fallout from several recent bank failures continues to rattle the industry. The move aims to increase accountability and prevent future bank failures caused by mismanagement and excessive risk-taking. As the banking industry faces ongoing challenges, President Biden's call for tougher penalties for senior bank executives is an important step towards ensuring that they are held responsible for their actions. It remains to be seen how Congress will respond to the President's request and what impact this will have on the future of the banking industry.
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