The Hill: Tester tells Fed to ‘claw back’ bonuses from Silicon Valley Bank execs
Sen. Jon Tester (D-Mon.) called on the Federal Reserve and federal regulators to “claw back” bonuses that were reportedly paid to Silicon Valley Bank executives just hours before the federal government took over the now-defunct bank.
“I’m calling on the (Federal Deposit Insurance Corporation) FDIC to use every tool at their disposal to claw back reported bonuses given out to the Bank’s leadership,” Tester said in a letter to Fed Chairman Jerome Powell and FDIC Chairman Martin Gruenberg. “Bank executives cashing out on their own failures is completely unacceptable, and I’ll take on anyone to stop it from happening.”
A report from CNBC this week said that the bank paid out annual bonuses to its employees just before the firm was taken over by federal regulators. The report said the bonuses were for work done in 2022 and that they were in the works days before the bank collapsed.
Federal regulators took steps to backstop all uninsured deposits at the bank, as the FDIC is only required to insure deposits of up to $250,000. But federal officials tapped into a federal insurance fund to place a safety net under all deposits at the bank, seeking to nip fears of a larger banking disaster in the bud.
That move from the Biden administration was blasted by many Republican lawmakers as a “bail out” of bank executives, harkening back to the widespread angst over the government rescue of large banks during the 2008 economic crisis.
Tester took aim at the bank’s executives, arguing it was wrong at a time when they were overseeing the failure of the bank to cash in on bonuses.
“It is clear that bank management made poor decisions and ignored risk factors that ultimately resulted in Silicon Valley Bank’s failure,” Tester said in the letter. “Regulators and law enforcement must take steps to investigate the actions of former bank management to hold the responsible parties accountable and ensure similar mistakes are avoided in the future.”