Biden asks Congress to crack down on executives at failed banks

Washington — President Biden on Friday called on Congress to give his administration the authority to impose tougher penalties on senior bank executives who mismanage lending institutions as the fallout from several recent bank failures continues to rattle the industry.

Specifically, the president is asking lawmakers to expand 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. 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 expand the FDIC's ability to bring fines against the executives of failed banks.

"The law limits the administration's authority to hold executives responsible," Mr. Biden said in a statement. "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. Congress must act to impose tougher penalties for senior bank executives whose mismanagement contributed to their institutions failing."