Biden, calls for tougher punishments for bankrupt bank executives

President Joe Biden on Friday called on Congress to allow regulators to impose tougher penalties on failing bank executives, including returning the money they were paid for work done and easing the process for them to no longer be a part of this industry.

Mr. Biden called on Congress to give the Federal Deposit Insurance Corporation these powers after the bankruptcies of Silicon Valley and Signature, developments that rocked the global banking industry.

“Strengthening accountability is important to prevent future mismanagement,” President Biden said in a statement. “Congress should act to impose tougher penalties on senior bank executives whose mismanagement contributed to the failure of the institutions they ran,” he added.

Currently the Federal Deposit Insurance Corporation can only recover payments made to executives at the nation’s largest banks.

Congress has already begun to deal with the consequences of bank bankruptcy in the country’s economy.

On Friday, the top Democrat on the House Financial Services Committee, Rep. Maxine Waters, wrote in a letter to regulators that as she drafts legislation to give regulators more powers “it is essential that agencies act immediately to investigate the reasons for the bankruptcy of these banks and to use the means available to hold the managers fully responsible for any wrongdoing”.

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