Bank failures: Joe Biden wants tougher penalties for wrongdoers
President Joe Biden (File photo)
Joe Biden believes that “Congress must act to more heavily sanction bank executives whose mismanagement contributed to bankruptcies,” according to a statement released Friday.
So that the American banking world is rocked by several failures, the president argues that no one is above the law and that tougher liability has an important deterrent effect in preventing future instances of mismanagement.
Noting that the law today limits the ability of administrative authorities to act, he believes that it should be easier for regulators to financially sanction bankers.
Joe Biden therefore asks American elected officials to give more power to regulatory authorities, and in particular to the Deposit Guarantee Agency (FDIC), the body that intervenes in the event of bank failure.
The American president would like this body to be able to claim compensation paid to offending bankers, impose fines on them and prohibit them from practicing in the sector in the future.
It remains to be seen how his appeal will be received. The Democratic Party, that of Joe Biden, controls the Senate, but the other house of Congress, that of Representatives, is dominated by the Republican opposition.
However, Republicans are generally hostile to any tightening of banking regulation.
Silicon Valley Bank went bankrupt after a Panicking among depositors, who withdrew billions of dollars amid fears surrounding the bank's finances.
Joe Biden's appeal to Congress comes after the American banking world was shaken 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.
Thursday, a group of large American banks had to come to the aid of another establishment, First Republic, considered to be the new weak link in the system.
This rescue does not x27; did not reassure the markets for long és, who were still very feverish on Friday.