Senator Bernie Sanders stated he plans to introduce a measure that might stop big-bank executives from serving on the boards of the regional Federal Reserve banks that oversee them.
“One of the crucial absurd elements of the Silicon Valley financial institution failure is that its CEO was a director of the identical physique accountable for regulating it: the San Francisco Fed,” the Vermont senator stated on Twitter Saturday. “I’ll be introducing a invoice to finish this battle of curiosity by banning huge financial institution CEOs from serving on Fed boards.”
Greg Becker, Silicon Valley Financial institution’s former president and chief govt officer, had served as a director on the San Francisco Fed board earlier than the financial institution failed final week. Lawmakers are scrutinizing why the San Francisco Fed failed to handle issues on the lender earlier than its collapse.
The Fed didn’t instantly reply to a request for touch upon Saturday.
Not like the Fed board in Washington, which is made up of officers nominated by the president and confirmed by the Senate, the Fed’s 12 regional banks are run by presidents chosen by personal boards of administrators. These administrators are made up of enterprise and group leaders, in addition to financial institution executives.
The 2010 Dodd-Frank Act modified the regulation to exclude financial institution executives serving on regional Fed boards — referred to as Class A administrators — from taking part within the choice of these financial institution presidents. The change was meant to forestall banks within the regional Fed districts from choosing the official charged with overseeing their day-to-day operations.
