In a March 17 statement, President Biden said he is “firmly committed to accountability for those responsible for this mess. No one is above the law, and strengthening accountability is an important deterrent to prevent mismanagement in the future.”
“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,” President Biden added.
According to a White House Fact Sheet, President Biden is calling on Congress to take the following measures:
Expand the FDIC’s authority to claw back compensation from executives across a broader set of failed banks: According to the Wall Street Journal, SVB’s chief executive officer is said to have sold more than $3 million in shares days before the bank entered FDIC receivership. Currently, under the Dodd-Frank Act, the FDIC’s claw back authority applies only to the largest financial institutions. “That authority should be extended to cover a broader set of large banks,” the White House Fact Sheet states.
Strengthen the FDIC’s authority to bar executives from holding jobs in the banking industry when their banks enter receivership: Under current regulations, the FDIC may bar executives from holding jobs at other banks if they engage in “willful or continuing disregard for the safety and soundness” of the bank. “Congress should strengthen this tool by lowering the legal standard for imposing this prohibition when a bank is put into FDIC receivership,” the White House Fact Sheet states.
Expand the FDIC’s authority to bring fines against executives of failed banks: Currently, the FDIC may seek monetary penalties from bank executives who “recklessly” engage in a pattern of “unsafe or unsound” practices, regardless of whether that bank enters receivership. According to the White House Fact Sheet, “to help the agency fully address executive misconduct, Congress should expand the FDIC’s authority to seek fines from negligent executives of failed banks when their actions contribute to the failure of their firms.” 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.