In a statement earlier this month, U.S. Rep. Marie Gluesenkamp Perez, D-Skamania County, announced she joined a bipartisan group of lawmakers in introducing legislation meant to hold executives accountable for bank failures.
The Failed Bank Executives Clawback Act would directly target what Gluesenkamp Perez believes is unjust compensation earned by executives who threaten the financial system and economy.
“After Silicon Valley Bank executives lined their pockets with big bonuses, people, businesses and the entire economy suffered. We need to make sure the people who make reckless decisions that throw the banking system into turmoil can’t walk away with millions of dollars as rewards, and this bipartisan bill makes that possible,” Gluesenkamp Perez said.
Since the Silicon Valley Bank and Signature Bank collapsed in March, reports have detailed how bank executives made millions in stock sales and bonuses from what Gluesenkamp Perez sees as their reckless management leading up to the bank failures. The proposed law would empower federal watchdogs to take compensation from bank executives who profit from mismanagement of bank deposits.
“Bank executives shouldn’t be rewarded when they oversee bank failures, and they shouldn’t be incentivized to put Americans’ money at heightened risk for bigger payouts,” said Rep. Katie Porter, D-California, a cosponsor of the bill. “Democrats and Republicans agree: when leaders at big banks engage in reckless risk-taking, they should be held accountable.”
“We cannot be a country with institutions ‘too big to fail’ and policies where reckless executives are not held accountable and shift the risk to taxpayers. The general public should not be on the hook for bad business decisions,” said co-sponsor Victoria Spartz, R-Indiana.
Ruben Gallego, D-Arizona, argued hardworking Arizonans and small businesses paid the price when Silicon Valley Bank failed while the bank’s executives “ran off into the sunset fat with cash from bonuses they paid themselves. That’s not how our system should work, and we should claw back those types of pay-outs. But SVB’s failure was years in the making — we need these bank executives to have skin in the game. I am proud to lead this bipartisan legislation to hold bank executives accountable when their mismanagement and incompetence hurts the American people.”
Another cosponsor, Ken Buck, R-Colorado, said working Americans shouldn’t be responsible for covering the costs resulting from the actions of Silicon Valley Bank executives.
“I’m proud to lead this bipartisan bill to make bank CEOs more accountable for any risky financial decisions they make,” Buck said.
U.S. senators Elizabeth Warren, D-Massachusetts; Josh Hawley, R-Missouri; Catherine Cortez Masto, D-Nevada; and Mike Braun, R-Indiana, have also introduced a companion bill in the U.S. Senate.
No comments on this item Please log in to comment by clicking here