US President Joe Biden urged Congress to approve measures enacting tougher punishments on banking executives if mismanagement contributed to their institutions failing.
| President Joe Biden urged Congress to approve measures enacting tougher punishments on banking executives if mismanagement contributed to their institutions failing, following“I’m firmly committed to accountability for those responsible for this mess. No one is above the law – and strengthening accountability is an important deterrent to prevent mismanagement in the future,” Biden said in a statement on Friday.
Companies often have their own policies around recovering executives’ pay, and most large public companies have adopted clawback policies which typically cover cases of misconduct or fraud, according to law firm Davis Polk.Still, executive compensation experts have criticised such policies because they are difficult to enforce.
A proposal led by Senator Elizabeth Warren and Representative Katie Porter that would strengthen banking regulations which were weakened in a 2018 rollback of the Dodd-Frank rules under then-President Donald Trump, is gaining support among their fellow Democratic lawmakers. “Unfortunately, Trump and Republicans put bank executives interests ahead of workers and consumers, and we need to repeal that law,” Congressman Mike Levin of California told Bloomberg News on Monday.However, any effort to strengthen regulations on the banking sector would face sharp opposition from the Republican-controlled House.A financial crisis would pose a serious challenge to Biden who is preparing to launch a reelection bid for 2024.
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