- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Kyle Brasseur2023-03-31T14:55:00
President Joe Biden on Thursday used his executive powers to urge regulators to reinforce banking regulation in the aftermath of the failures of Silicon Valley Bank (SVB) and Signature Bank.
In a White House fact sheet, Biden called on federal banking agencies to “consider a set of reforms that will reduce the risk of future banking crises.” The recommendations put forward largely reverse changes to banking regulation made during the Trump administration, which aimed to reduce burdens on mid-sized institutions regarding liquidity requirements, stress tests, and more.
Democrats have pointed to these changes as a significant driving factor behind what went wrong to cause SVB’s collapse. Republicans have levied criticism at the actions of the current administration and on the social and climate-related activities of SVB.
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San Francisco-based First Republic Bank was closed by state and federal banking regulators over the weekend, then sold to JPMorgan Chase Bank. The failure is the second largest in U.S. banking history.
The collapse of Silicon Valley Bank highlighted for the Federal Deposit Insurance Corporation some of the impediments to a quick bank sale, including failing to provide rapid access to quality financial data and lists of key employees.
The Failed Bank Executives Clawback Act seeks to require the Federal Deposit Insurance Corporation to claw back five years’ worth of compensation from executives who lead failed banks.
The U.S. Supreme Court extended the statute of limitations for businesses attempting to challenge some federal regulations, allowing regulated entities a longer timeline to appeal a decision.
The Supreme Court of the United States overturned a long-held precedent in which courts deferred to federal agencies in interpreting complex or ambiguous regulations–a decision that could make thousands of federal regulations more vulnerable to legal challenges.
Financial institutions would be required to conduct more thorough risk assessments on their anti-money laundering/countering the financing of terrorism programs under a new rule proposed by the Treasury Department’s Financial Crimes Enforcement Network.
