Biden demands Congress hold negligent bank executives accountable

To stem banking crisis, more than a dozen U.S. banks inject funds into First Republic Bank to avert its collapse.

Photo by Tony Webster on Flickr / CC BY 2.0

President Joe Biden has asked Congress to hold bank executives accountable when their banks fail and enter Federal Deposit Insurance Corporation (FDIC) receivership.

He said when banks fail because of mismanagement and excessive risk taking, regulators should cut executives’ compensation, impose civil penalties, and ban them from working in the banking industry again.

The president added Congress should expand FDIC’s authority to impose penalties on negligent executives. Currently, the FDIC can only impose financial penalties on bank executives who recklessly engage in a pattern of unsafe or unsound practices.

Meanwhile, Silicon Valley Bank’s (SVB) parent company, SVB Financial Group, has filed for bankruptcy protection.

To control the crisis triggered by SVB and Signature Bank’s collapse, the Federal Reserve Bank and JPMorgan Chase & Co. have given First Republic Bank access of up to $70 billion in liquidity. 12 other U.S. banks have also announced they will inject $30 billion into First Republic.

Sources (5)
helpPrimary sources where the above facts were found.
Presidential statement
SVB Financial Group bankruptcy application
POTUS tweet
First Republic statement
First Republic statement