Elizabeth Warren Calls Out Bank Executives’ Crisis Profiteering
U.S. Senator Elizabeth Warren advocates retrieving bonuses awarded to bank executives who allegedly mismanaged risk, resulting in the recent banking crisis.
Warren has expressed her concern over the enrichment of executives through risky activities while others suffer the consequences. She specifically requested that bank executives return the $60 million they earned due to the implementation of weaker controls.
Among those implicated, Silicon Valley Bank executive Gregory W. Becker reportedly received $40 million after Congress allowed the bank to assume greater risk. Becker himself confirmed earning $40 million since 2019. Additionally, it is alleged that Becker disregarded 17 warnings from the Federal Reserve regarding liquidity risk management, weak governance, and capital planning.
Senator Warren also confronted Scott Shay, the former chairman of crypto-friendly Signature Bank, questioning his willingness to return the $20 million he earned despite overlooking liquidity issues that led to a $2.5 billion Federal Deposit Insurance Corporation (FDIC) bailout.
Shay indicated no intention of returning the funds and was accused by Senator Lummis of deflecting blame onto regulators and digital asset depositors for the bank’s liquidity crisis in March.
As a result of the crisis, depositors withdrew funds from Silicon Valley Bank and Signature Bank following the closure of the crypto flagship bank, Silvergate Bank. Both banks were compelled to sell securities at significant losses in order to generate liquidity for withdrawals.
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The FDIC intervened subsequently to safeguard deposits. These events eroded confidence in the U.S. banking system and generated concerns among U.S. crypto platforms. Circle’s USDC stablecoin, for instance, lost its peg after revealing frozen deposits at Silicon Valley Bank, while investment platforms MaiCapital and Digital Asset Capital Management were forced to seek offshore banking partners.
In response to the failures and the relaxed capital and liquidity requirements for smaller banks, various politicians, including Senator Warren, have initiated measures to enforce stricter bank regulations.
Senator Warren also confirmed her involvement, alongside three other lawmakers, in introducing a bill to curb excessive executive compensation, often referred to as “crazy paychecks.” However, the bill is likely to encounter opposition from House Republicans and Senate Republicans, who have intentionally prolonged debates surrounding its passage.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
