Senator Bernie Sanders stated he plans to introduce a measure that will stop big-bank executives from serving on the boards of the regional Federal Reserve banks that oversee them.
“One of the vital absurd facets of the Silicon Valley financial institution failure is that its CEO was a director of the identical physique in control of 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 large financial institution CEOs from serving on Fed boards.”
Greg Becker, Silicon Valley Financial institution’s former president and chief government 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.
In contrast to 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 neighborhood 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 collaborating within the collection of these financial institution presidents. The change was meant to stop banks within the regional Fed districts from deciding on the official charged with overseeing their day-to-day operations.
