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Blumenthal calls for accountability from executives and introduces new banking legislation

“There has to be accountability for the mismanagement,” he said during a press conference Monday.

HARTFORD, Conn. — U.S. Sen. Richard Blumenthal is taking aim at bank executives, introducing new legislation Monday he says will hold them accountable.

Blumenthal said bank failures, like we’ve seen recently with Silicon Valley, Signature, and First Republic Banks, could have been avoided. He’s calling for action from Congress and a DOJ investigation.

“There has to be accountability for the mismanagement,” Blumenthal said Monday.

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This new legislation would allow the Treasury Department to recoup bonuses and stock profits from executives of failed banks.

“Literally within hours of the failure of this bank, major executives of Silicon Valley Bank were lining their pockets,” added Blumenthal.

He said “The DEPOSIT Act” will ensure bank executives are financially responsible and the burden of their actions will not fall on taxpayers.

“That money should be recouped, clawed back, for the benefit of taxpayers and depositors,” Blumenthal continued. 

He’s also thinking long-term, signing on to another bill to repeal the 2018 rollback of Dodd-Frank protections, which he calls “Trump-era rollbacks in oversight.”

“No question that there will be a serious intensive review of what went wrong here and it's going to cause probably stricter regulation of the smaller regional banks,” he said.

Could measures like these really help consumers? Some financial experts say maybe.

They believe lawmakers need to implement “intelligent regulation.”

“The issue that Silicon Valley Bank had, interestingly enough, was not one of the scenarios that they would have been stress tested for, even in the biggest banks,” said University of New Haven practitioner in residence, David Sacco. “The idea that what got rolled back a few years ago would have made a difference, wouldn't have essentially.”

Sacco says for now, though, Connecticut residents don’t have to be too worried.

“The reality is I don't think anything will threaten the banking system like what we saw back in 2008. So I think consumers can be confident about that,” he said. “If your money's in the bank, it is as secure as it was two months ago or three months ago.”

Blumenthal says he’s already spoken with a number of Republican legislators and is hoping for bipartisan support for these measures.

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