President Joe Biden on Friday called for U.S. lawmakers to make it “easier for regulators to claw back compensation from executives, to impose civil penalties, and to ban executives from working in the banking industry again.”
His position comes after regulators in recent days closed down Silicon Valley Bank
SIVB,
and New York’s Signature Bank
SBNY,
-22.87%,
as well as after big banks on Thursday made an unprecedented $30 billion deposit at First Republic Bank.
“Congress must act to impose tougher penalties for senior bank executives whose mismanagement contributed to their institutions failing,” Biden said in a statement released by the White House.
Democratic Sen. Sherrod Brown of Ohio, chairman of the Senate Banking Committee, signaled agreement with Biden, saying in a statement on Friday that his panel will be working on “holding accountable” bank executives as well as “the regulators tasked with overseeing them.”
First Republic’s stock
FRC,
-26.03%
was down more than 20% on Friday as investors remained concerned about the bank despite the big infusion of money, and other bank stocks
KBE,
-4.49%
also lost ground.
Now read: Biden says Americans can have confidence that banking system is safe
And see: Banks have borrowed $165 billion from the Fed in past week after SVB failure
Plus: ‘We need to stop this now.’ First Republic support is spreading financial contagion, Ackman says
