Sen. Elizabeth Warren wants banking to be “boring” again after bank failures Silicon Valley Bank And signature bank,
“What I want to do is get banking back where it should be, and it’s boring,” Warren, D-Mass., said on CNBC’s Friday morning.screaming in the street“Banking is supposed to be about putting your money in there and you can trust that it’s going to be there, and that’s true if you’re a family, that’s true if you’re a small business.”
Warren said the problem began under the Trump administration, when bank CEOs lobbied Congress to weaken regulation for regional and medium-sized banks. Silicon Valley Bank was among those who lobbied for changes, with Warren pointing out that years of regulations had increased bank profits.
During a hearing this week, Warren, a longtime critic of the financial industry, put pressure on the country’s top banking regulators How SVB and Signature failed practically overnight earlier this month. financial regulator closed two banksciting fear of systematic contagion, Banks started running after negative news. Failed banks inconsistently serviced startups and cryptocurrency companies.
The event marked the largest US banking failures since the 2008 financial crisis and the second and third largest bank failures in US history.
since the week collapse of banksWarren has authored or sponsored three new bills related to bank oversight.
The first would reverse a Trump-era bill that weakened oversight of medium-sized banks. The second would create an inspector general position within the Federal Reserve, and the third would ban executives of publicly traded companies from selling stock options for three years.
US Senator Elizabeth Warren (D-MA) is interviewed on the trading floor at the New York Stock Exchange (NYSE) on March 31, 2023 in New York City, US.
Andrew Kelly | reuters
“What we want to do is align the incentives,” Warren said Friday. “I have a bipartisan bill for clawback and the whole idea is to go ahead and tell these CEOs ‘hey if you put this bank at risk and the bank explodes, you’re going to lose that fancy bonus, you You’re going to lose that big salary, you’re going to lose those stock options.'”
Warren said that banking should not be an industry that attracts risk-takers.
Warren said, “I really want to say to the bank CEOs, if you’re the kind of guy or girl who wants to roll those dice and take a big risk, don’t go into banking.” “Banking is about steady profit. Banks certainly need to be able to make a profit, but when banks take on risks, they put depositors at risk, they put small businesses at risk, and ultimately As we learned with these million-dollar banks, they put our entire economy at risk.”
Warren rebuked banking regulators for not doing enough and called on Congress to join them in rolling back the safeguards.
“You have to see everything that’s broken here,” Warren said. “We allowed regulators to take their eye off the ball. Banking is a regulated industry because of the impact it has on the rest of the economy. Just like Joe Biden Said yesterday – they need to start tightening those rules now.”