WASHINGTON, D.C. – President Joe Biden today called on Congress to strengthen laws to hold bankers accountable for misconduct, including methods to claw back bonuses. Hours before Silicon Valley Bank closed, senior managers paid themselves millions in bonuses. Lisa Gilbert, executive vice president of Public Citizen, released the following statement:
“President Biden is right to seek redress from the reckless managers at Silicon Valley Bank. Congress should heed his request, not only to bring accountability for those causing this financial disaster, but to help deter future catastrophes.
“Congress should require banks to hold a significant portion of senior banker pay in an escrow account. If the bank goes bust, that pot should be used to pay uninsured depositors. This would keep all managers at the bank on alert for problems. These insiders are better positioned than anyone, even regulators, to detect and fix problems. After all, their own pay would be in jeopardy. In the meantime, regulators can achieve the same result by finalizing a long-ignored statute from the 2010 Dodd-Frank Wall Street Reform Act, known as Section 956.”