Biden asks for new financial regulations

President wants legislation to claw back ill-gotten gains

President Joe Biden asked Congress on Friday to pass legislation to give financial regulators broad new powers to claw back ill-gotten gains from the executives of failed banks and impose fines for failures.

The proposal, a response to the federal rescue of depositors at Silicon Valley Bank and Signature Bank last week, would also seek to bar executives at failed banks from taking other jobs in the financial industry.

The measures contained in Biden's plan would build on existing regulatory powers held by the Federal Deposit Insurance Corp. Administration officials were still weighing on Friday whether to ask Congress for further changes to financial regulation in the days to come.

“Strengthening accountability is an important deterrent to prevent mismanagement in the future,” Biden said in a statement released by the White

House.

“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,” he said, adding that Congress would have to pass legislation to make that possible.

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

One plank of the proposal would broaden the FDIC's ability to seek the return of compensation from executives of failed banks, in response to reports that the CEO of Silicon Valley Bank sold $3 million in shares of the bank shortly before it was taken over by federal regulators a week ago. Regulators' current clawback powers are limited to the largest banks; Biden would expand them to cover banks the size of Signature and Silicon Valley Bank.

In a contrast with top Silicon Valley Bank officials, a senior Signature Bank executive and one of its board members bought shares in the firm's stock last Friday while it was experiencing a run, reg