Senator Bernie Sanders has said he plans to introduce a measure that would bar the heads of big banks from sitting on the boards of regional Federal Reserve banks that oversee them.
“One of the most absurd aspects of the Silicon Valley bank’s failure is that its CEO was a director of the same body responsible for regulating it: the San Francisco Fed,” the Vermont senator said on Twitter SATURDAY. “I will be introduce a bill put an end to this conflict of interest by banning the CEOs of the big banks from sitting on the boards of the Fed.
Greg Becker, a former president and CEO of Silicon Valley Bank, had served as a trustee on the San Francisco Fed’s board of directors before the bank’s bankruptcy last week. Lawmakers are examining why the San Francisco Fed failed to resolve the lender’s problems before it collapsed.
The Fed did not immediately respond to a request for comment on Saturday.
Unlike the Fed’s board in Washington, which is made up of officials appointed by the president and confirmed by the Senate, the Fed’s 12 regional banks are led by chairmen chosen by private boards. These directors are made up of business and community leaders, as well as bank leaders.
The 2010 Dodd-Frank Act changed the law to exclude bank executives serving on regional Fed boards — known as Class A directors — from participating in the selection of such bank presidents. The change was intended to prevent banks in regional Fed districts from selecting the official to oversee their day-to-day operations.