Starling Insights Editorial Board
Mar 20, 2023
Following a string of bank failures and crises, President Joe Biden urged Congress on Friday to bolster the ability to hold senior banks to account for misconduct.
"[T]he President believes Congress can and should do more to hold senior bank executives accountable," the statement read. "Congress must take action to strengthen the ability of the federal government to hold senior management accountable when their banks fail and enter FDIC receivership."
President Biden called for legislation to empower the Federal Deposit Insurance Corporation (FDIC) to punish executives of banks that fail due to excessive risk-taking and mismanagement. He recommended that the FDIC be given the power to claw back compensation, bring punitive fines, and potentially ban executives from working in the banking industry in the future.
"The President is eager to work with Congress to strengthen accountability in these three areas — and others that Members of Congress identify," the statement concluded. "As the President has said, in his administration, no one is above the law."
Is the US on the way to having its own senior managers' accountability regime? If so, bank executives would be wise to study the rules put in place in other countries throughout the world. Earlier this year, Starling published "The Era of Accountability," a Deeper Dive supplement to our 2022 Compendium, which gives a global overview of these regimes, and the other ways executives are being held to account for culture and conduct concerns.
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