Joe Biden believes that “Congress should act to more severely penalize bank executives whose mismanagement has contributed to the failure of their stores,” according to a press release published Friday. While the American banking world is rocked by several failures, the president argues that “no one is above the law” and that “tightening accountability has a significant deterrent effect to prevent future mismanagement.”
After pointing out that the law today limits the ability of administrative authorities to act, he considers that it should be “easier for regulators” to penalize bankers financially. Therefore, Joe Biden calls on US parliamentarians to grant more power to regulatory authorities and, in particular, to the Deposit Insurance Agency (FDIC), the body that intervenes in the event of bank failure. In particular, the US president would like this organization to be able to “reclaim” the remuneration paid to offending bankers, impose fines on them and prohibit them from practicing in the sector in the future.
Difficult to convince the House of Representatives
It remains to be seen how his call will be received: the Democratic party, Joe Biden’s, controls the Senate, but the other chamber of Congress, that of representatives, is dominated by the Republican opposition. However, conservatives are generally hostile to any tightening of banking regulation.
Joe Biden’s appeal to Congress comes after the US banking world was rocked by the bankruptcy of Silicon Valley Bank, an establishment linked to the world of technology, and by the debacle of Signature Bank, a New York establishment.
On Thursday, a group of major US banks had to come to the aid of another institution, First Republic, considered the new weak link in the system. This bailout did not reassure markets for long, which were still very feverish on Friday.
Source: BFM TV
