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WASHINGTON (AP) -- Weeks after the failure of two banks, President Joe Biden called Thursday for independent regulatory agencies to impose tighter rules on the financial system, telling them that they can act under current law without additional steps taken by Congress.
The recommended changes outlined by the White House try to put a clear blame on the Trump administration for weakening supervision of regional banks, issuing a fact sheet that said Biden's predecessor "weakened many important common-sense requirements and supervision."
Rattling the financial markets and U.S. voters alike, the California-based Silicon Valley Bank and New York-based Signature Bank failed over the course of a weekend and required government intervention. Then another financial institution, First Republic Bank, received an emergency $30 billion infusion of funds from 11 large private banks.
Biden wants to revive and expand rules for mid-size banks that face less scrutiny than the industry's behemoths, with administration officials saying that U.S. banks have stabilized since the collapse of Silicon Valley Bank on March 10 as it rolls out its recommended changes.
Once banks hold assets of more than $100 billion, the administration is asking them to hold more capital to absorb losses and face enhanced stress testing to ensure they could withstand a possible crisis. They would also need to provide the government with "living wills" to help them be unwound in case of failure.
In addition, Biden wants regulators to provide more aggressive supervision of banks and have them ensure that community banks are not responsible for replenishing the federal insurance fund
for bank deposits.
Greg Baer, CEO of the Bank Policy Institute, criticized the administration's proposals, saying it would impose costs on the economy as the bank failures are still being reviewed.
"This has a strong feeling of ready, fire, aim," said Baer, whose advocacy group represents the financial sector.
The Biden administration's public push is part of a larger effort by the Biden to ensure that individual bank failures can be contained without triggering a chain reaction across the wider financial system.
In a speech scheduled for Thursday afternoon, Treasury Secretary Janet Yellen plans to note that regulations have been weakened in recent years as the shocks of the 2008 financial crisis wore off, but that the recent failures required swift government intervention in order to preserve public confidence.