Senator Bernie Sanders said he would introduce a measure that would prevent big bank executives from serving on the boards of regional Federal Reserve banks that oversee them.
“One of the most absurd aspects of the Silicon Valley bank failure is that the CEO is a director of the same body responsible for regulating it: the San Francisco Fed,” the Vermont senator said on Twitter on Friday. “I will introduce the bill to end this conflict of interest by banning big bank CEOs from serving on the Fed board.
Greg Becker, the former president and chief executive officer of Silicon Valley Bank, had been a director on the board of the San Francisco Fed before the bank failed last week. Lawmakers are looking into why the San Francisco Fed failed to address problems at the lender 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 nominated by the president and confirmed by the Senate, the Fed’s 12 regional banks are managed by the president who is selected by a private board of directors. The board of directors includes business and community leaders, as well as bank executives.
The 2010 Dodd-Frank Act changed the law to exclude bank executives who serve on regional Fed boards — known as Class A directors — from participating in the election of the bank’s president. The change is intended to prevent banks in regional Fed districts from appointing officials assigned to oversee their day-to-day operations.