resolution – Federal Financial Analytics

Executive-Compensation Clawbacks

Executive compensation incentives have proved among the most important reform priorities in the wake of recent bank failures. In addition to efforts to complete long-delayed regulations mandated by the Dodd-Frank Act, bipartisan Members are pressing different approaches to clawing back compensation from failed-bank executives who appear to have profited handsomely despite allowing or even encouraging untenable risks. One major, recent measure would not only grant the FDIC express clawback authority in the wake of non-systemic resolutions, but also expand clawbacks to a wide range of persons affiliated with the failed bank and to holding-company investors.

COMPENSATION35.pdf…

REFORM218

Max Camateros-Mann2023-03-29T17:27:51-04:00March 29th, 2023|5- Client Report|

HFSC Focuses on Supervision, Clawbacks, Process, New Resolution and Run-Risk Options

Today’s HFSC hearing on recent bank failures was more partisan than yesterday’s Senate Banking session (see Client Report REFORM217). Still, there were significant areas of agreement evidenced not only through the marathon hearing, but also at its end, when Chairman McHenry (R-NC) and Ranking Member Waters (D-CA) agreed that they are frustrated with the regulators’ testimony, want more supervisory accountability, and will demand reforms once promised internal investigations are concluded. Several new issues were brought out today, including why the FedWire closing times precluded liquidity support that might have sustained SVB liquidity, whether TLAC should be required at banks of all sizes, tactics to quell viral runs, and whether tough new rules will cover mid-sized banks and/or community institutions.

REFORM218.pdf…