From U.S. Senator Mark Warner, D-VA:
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Friends, You may have seen the headlines about the collapse of Silicon Valley Bank (SVB) recently. Fortunately, the federal government stepped in and took important steps to stabilize our economy and protect depositors, but this very nearly did a lot of damage to our entire financial system and could have disrupted paychecks, savings, and retirement accounts for millions of Americans. I want to get out all of the facts about exactly what went wrong, but it’s already clear that a few key mistakes were made. Executives tied up a lot of deposits in longer-term investments, and failed to manage risks as interest rates rose. When those facts became clear, some folks online spurred the first-ever social media-based bank run, threatening the cash-strapped bank.So amid some pretty clear mismanagement, why were SVB executives still receiving bonuses just hours before the government stepped in to take over the bank?That’s a question that’s been bothering me, so I’m taking action with some of my colleagues to address it. I’m a proud cosponsor of the DEPOSIT Act, which would allow Congress to hold some of these executives accountable. The DEPOSIT Act will claw back all executive bonuses and profits from stock sales made within 60 days of a bank failing. It would also impose a 90% tax on the bonuses of any wealthy exec during a year when a bank is taken over by the government.All this recouped money will go to a fund that pays back depositors who lose out in bank failures, allowing small businesses to continue making payroll.Let’s crack down on corporate greed and make sure your money is safe. This is a good first step, and I’ll also be taking more action as we continue to learn more about what led to this failure.If you want to get in touch with me about our economy or another issue that’s important to you, you can send me an email anytime using the form on my Senate website. You can also find more updates on my Facebook, Instagram, and Twitter. I look forward to hearing from you.
Sincerely,
[signature: Mark Warner]
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