A bipartisan group of senators has introduced a bill to give regulators the authority to claw back executive compensation after some bank officials made millions and got bonuses before the collapse of Silicon Valley Bank and Signature Bank.
Democratic Sens. Elizabeth Warren of Massachusetts and Catherine Cortez-Masto of Nevada teamed up with Republican Sens. Josh Hawley of Missouri and Mike Braun of Indiana to propose the Failed Bank Executive Clawback Act. The bill would require federal regulators to claw back all or part of the compensation received by bank executives in the five years leading up to a bank's failure.
"Americans are sick and tired of fat cat bankers paying themselves handsomely while risking other people's hard-earned money," Warren said."It's time for Congress to step up and strengthen the law so bank executives bear the cost of failure, not line their pockets and walk away scot-free." "Bank executives who make risky investments with customers' money shouldn't be permitted to profit in the good times, and then avoid financial consequences when things go south," said Hawley."This legislation puts the executives' own profits on the line, and that's exactly as it should be."
"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," Mr. Biden said in a statement on March 17."Congress must act to impose tougher penalties for senior bank executives whose mismanagement contributed to their institutions failing.
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