Elizabeth Warren Touts Bi-Partisan Bill, Tells Banks: Can't Expect To Keep A Ton Of Money 'When You Blow Up'

Sen. Elizabeth Warren (D-Mass.) has highlighted a bi-partisan bill in her tweet which she says will restrict banks from taking "a ton of risk." The bill, proposed by Warren and Sen. Rick Scott (R-Fla.), is set to be introduced on Wednesday, according to a Bloomberg report.

"I've got a bipartisan bill which basically says this to bank executives: you can't take on a ton of risk, pay yourselves a ton of money, and expect to keep that money when you blow up your bank," Warren said in her tweet.

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The bill intends to restrict big banks' presence on the boards of regional Federal Reserve banks, part of a broader measure targeted at strengthening transparency and ethics rules at the apex institution.

It would limit which lenders can serve as Class A directors of the Fed's 12 regional banks, restricting eligibility to lenders with less than $50 billion in assets and blocking banks that have received an "above-average" number of outstanding supervisory warnings, the report said.

Bank Failures: The proposal comes in the wake of a series of bank failures in the U.S. that saw Silicon Valley Bank, Signature Bank and First Republic Bank collapse over the past few months. Following the turmoil, the central bank has received a lot of criticism over its failure to prevent or timely detect issues with the lenders.

The legislation requires the Fed to release more details to the public about how directors and presidents of the regional banks are chosen and establish a public comment and hearing process for filling those positions, the report said. It would also require a larger number of directors to be appointed by the Federal Reserve’s Board of Governors and limit reserve bank presidents to serving in the position for no more than 10 years.

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