(Bloomberg) -- Senator Bernie Sanders said he plans to introduce a measure that would prevent big-bank executives from serving on the boards of the regional Federal Reserve banks that oversee them.
Most Read from Bloomberg
Credit Suisse Crisis Nears Finale as UBS Discussions Heat Up
Trump Says He Expects to Be Arrested on Tuesday
CFA Revised Exam Cuts Study Time, Stresses Practical Skills
Deutsche Bank Eyes Some Credit Suisse Assets
UBS to Explore Credit Suisse Deal in Crisis Combination
"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 said 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 executive officer, had served as a director on the San Francisco Fed board before the bank failed last week. Lawmakers are scrutinizing why the San Francisco Fed failed to address problems at the lender before its collapse.
The Fed didn't immediately respond to a request for comment on Saturday.
Unlike the Fed board in Washington, which is made up of officials nominated by the president and confirmed by the Senate, the Fed's 12 regional banks are run by presidents chosen by private boards of directors. Those directors are made up of business and community leaders, as well as bank executives.
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 those bank presidents. The change was meant to prevent banks in the regional Fed districts from selecting the official charged with overseeing their day-to-day operations.
(Updates with no immediate comment from Fed in fourth paragraph.)
Most Read from Bloomberg Businessweek
ChatGPT Advances Are Moving So Fast Regulators Can't Keep Up
Foxconn Finds EVs Are Harder to Build Than iPhones
Trump's Tariffs Couldn't Save the California Olive Industry
Pumping Heat a Mile Underground Is Helping One City Cut Carbon
Brazil's Surprise Oil Tax Puts $20 Billion in Investment at Risk
©2023 Bloomberg L.P.
