Bankruptcies – US President Biden wants managers to be punished more severely


In view of the recent banking turmoil, US President Joe Biden is calling for tighter regulation of the financial sector and dire consequences for managers.

“No one is above the law,” Biden told Congress. The range of sanctions should range from a penalty to a refund of compensation to the exclusion of the industry. He called on Congress in Washington on Friday to give regulators more powers accordingly. The recoveries must also include the profit from the sale of shares.

The US government has been trying to alleviate the situation for days – so far with limited success. After the bankruptcy of start-up financier Silicon Valley Bank— the biggest collapse of a US money house since the 2008 financial crisis — the US government over the weekend tried to calm the nerves of bank customers in the country with a far-reaching deposit guarantee.

At a congressional hearing in Washington on Thursday, Treasury Secretary Janet Yellen reiterated that the banking system remains stable and secure and there is no need to worry about deposits. “The government has taken decisive and forceful action,” Yellen said.

Just how tense the situation in the US banking sector has been recently, according to data from the central bank on Thursday. In the seven days ending March 15, the Fed issued a record $152.85 billion to financial institutions through its emergency liquidity program, also known as the rebate window. This surpassed the previous high of $111 billion (about €104 billion) from the 2008 financial crisis.

By comparison, in the previous week they had Banks only claimed $4.58 billion from the rebate window. An additional $11.9 billion flowed from the emergency program set up by the Fed on Sunday.BankTerm Financing Program“, Wed Banks Receive anonymous loans on particularly favorable terms.

Financial expert: Europe needs to catch up
According to financial expert Gerhard Schick, Europe needs to catch up with the US in banking regulation to be prepared for emergencies. When the Silicon Valley Bank in California ran into problems, the US deposit insurance system immediately intervened and managed to create stability very quickly, the board of directors of the Finanzwende citizens’ movement said in ARD’s Morgenmagazin on Friday.

“In Europe, we have not yet had such an authority that combines liquidation and deposit insurance.” Here the banking union came to a standstill halfway. “You really have to deal with that now,” said the former German member of the Bundestag for the Greens.

Source: Krone


Please enter your comment!
Please enter your name here

Share post:



More like this