Bipartisan Senate bill would seize pay of failed banks’ executives

Bipartisan Senate bill would seize pay of failed banks’ executives

Senators overseeing the banking business are taking their first step in an try and punish executives who preside over failures just like the March collapse of Silicon Valley Financial institution.

Sens. Sherrod Brown (D-Ohio) and Tim Scott (R-S.C.), the leaders of the Senate Banking Committee, on Thursday unveiled a invoice empowering regulators to grab financial institution executives’ compensation from the 24 months main as much as a failure. Along with their salaries, executives may very well be compelled to forfeit bonuses and income from the sale of financial institution inventory.

The invoice additionally triples to $3 million the civil penalty that regulators might assess on an govt who “recklessly” violates the legislation or engages in “unsafe and unsound practices.”

“People have watched executives take their cash, run banks into the bottom, and get away with it too many occasions earlier than,” Brown stated in a press release. “It’s time for CEOs to face penalties for his or her actions, identical to everybody else.”

Monetary regulators proceed to research the collapse of Silicon Valley Financial institution, whose failure rattled the sector and led to federal intervention. The introduction of the invoice from Brown and Scott got here on the identical day as a Wall Avenue Journal report that stated the Federal Reserve and the Securities and Trade Fee are inspecting the position of Goldman Sachs, which purchased SVB’s securities portfolio whereas advising the troubled financial institution on elevating capital earlier than it folded.

Goldman Sachs acknowledged in a Could submitting that it’s “cooperating with and offering info to numerous governmental our bodies in reference to their investigations and inquiries” into Silicon Valley Financial institution’s collapse.

SVB’s collapse got here a couple of years after it launched into push for speedy development. An April 28 report from the Federal Reserve positioned the majority of the blame for the financial institution’s crash on lax oversight by regulators and mismanagement by executives. It additionally sharply criticized consultants who “didn’t design an efficient program” for assessing SVB’s issues.


Leave a Reply

Your email address will not be published. Required fields are marked *