SVB collapse: Biden calls for harsher penalties on banking executives

PJoe Biden, resident, demanded harsher punishments for bank executives after the collapse of Silicon Valley Bank.

Although he acknowledged his limitations under the existing law, the president urged Congress to increase penalties for leaders of bank failures.

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“I’m firmly committed to accountability for those responsible for this mess,” The president made the statement in a statement. “No one is above the law — and strengthening accountability is an important deterrent to prevent mismanagement in the future.”

To make this happen, however, legislative action is required. Biden called for Congress to take that action.

“The law limits the administration’s authority to hold executives responsible. 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,” He said.

Since SVB collapsed one week ago, the president and top Democrats have supported new laws and increased banking regulations. California’s bank collapse has left the entire banking system on the edge of collapse. To stabilize the situation, drastic measures have been taken by both the public sector and the private sector.

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Biden supported the decision to fully guarantee bank deposits at SVB, and stressed that the banking system was stable, despite the need for tighter regulations.

“This week, we took decisive action to stabilize the banking system without putting taxpayer dollars at risk,” The president spoke. “That action was necessary to protect jobs and small businesses, and no losses will be borne by the taxpayers. Our banking system is more resilient and stable today because of the actions we took. On Monday morning, I told the American people and American businesses that they should feel confident that their deposits will be there if and when they need them. That continues to be the case.”