By Pete Schroeder
WASHINGTON (Reuters) – The U.S. Senate Banking Committee will consider a bill Wednesday that would allow regulators to claw back compensation for executives at failed banks.
The measure, backed by committee Chairman Sherrod Brown and Senator Tim Scott, the panel’s top Republican, would give regulators the ability to reclaim two years’ worth of compensation paid out to executives after a bank failure, as well as strengthen their ability to assess civil penalties on executives who fail to adequately manage their banks.
The bill, which also would require banks to include in their bylaws standards around responsible bank management, comes in response to the abrupt failures of Silicon Valley Bank and other banks in recent months, which set off broader turmoil in the banking sector.
Given the backing of senior members on the panel from both parties, the legislation may be Congress’s best chance to enact a new law in response to that crisis, which was met with broad criticism of the industry and bank supervisors by lawmakers.
“Americans have watched executives take their money, run banks into the ground, and get away with it too many times before. It’s time for CEOs to face consequences for their actions, just like everyone else,” said Brown in a statement.
(Reporting by Pete Schroeder, editing by Deepa Babington)
