Senator Bernie Sanders mentioned he plans to introduce a measure that may stop big-bank executives from serving on the boards of the regional Federal Reserve banks that oversee them.
“One of the most absurd aspects of the Silicon Valley bank failure is that its CEO was a director of the same body in charge of regulating it: the San Francisco Fed,” the Vermont senator mentioned on Twitter Saturday. “I’ll be introducing a bill to end this conflict of interest by banning big bank CEOs from serving on Fed boards.”
Greg Becker, Silicon Valley Bank’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 deal with issues on the lender earlier than its collapse.
The Fed didn’t instantly reply to a request for touch upon Saturday.
Unlike 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 non-public boards of administrators. Those administrators are made up of enterprise and neighborhood leaders, in addition to financial institution executives.
The 2010 Dodd-Frank Act modified the legislation to exclude financial institution executives serving on regional Fed boards — generally known as Class A administrators — from collaborating within the number of these financial institution presidents. The change was meant to forestall banks within the regional Fed districts from deciding on the official charged with overseeing their day-to-day operations.