President Joe Biden on Friday called on Congress to allow regulators to impose tougher penalties on the executives of failed banks, including clawing back compensation and making it easier to bar them from working in the industry.

Biden wants the Federal Deposit Insurance Corporation to be able to force the return of compensation paid to executives at a broader range of banks should they fail, and to lower the threshold for the regulator to impose fines and bar executives from working at another bank.

He called on Congress to grant the FDIC those powers after the failures of Silicon Valley Bank and Signature Bank sent shockwaves through the global banking industry.

“Strengthening accountability is an important deterrent to prevent mismanagement in the future,” Biden said in a statement. “Congress must act to impose tougher penalties for senior bank executives whose mismanagement contributed to their institutions failing.”

Currently the FDIC can only take back the compensation of executives at the largest banks in the nation, and other penalties on executives require “recklessness” or acting with “willful or continuing disregard" for their bank's health. Biden wants Congress to allow the regulator to impose penalties for “negligent” executives — a lower legal threshold.

The White House highlighted reports that Silicon Valley Bank CEO Gregory Becker sold $3 million worth of shares in the bank in the days before its collapse, saying Biden wants the FDIC to have the authority to go after that compensation.

The shuttering of Silicon Valley Bank last Friday and of New York’s Signature Bank two days later has revived bad memories of the financial crisis that plunged the United States into the Great Recession about 15 years ago.

The federal government, determined to restore public confidence in the banking system, earlier moved to protect all the banks’ deposits, even those that exceeded the FDIC’s $250,000 limit per individual account.

New Zealand will not be immune from the fallout caused by the collapse of Silicon Valley Bank (SVB), one of the biggest in the United States.

SVB, which specialised in serving tech companies and startups, has had its assets seized by the US government after a bank run caused it to fail.

Tech company CEOs and founders were seen lining up outside SVB branches, desperate to salvage as much of their assets as possible.

"We wired out the money yesterday, but Silicon Valley Bank did not honour our wire, so we were not able to move any of our cash out of our bank account," said Stefan Kalb, chief executive of Shelf Engine.

SVB was the 16th largest bank in the USA, and the second biggest to fail after Washington Mutual's downfall at the height of the 2008 financial crisis.

Some have argued the rafts of redundancies in US tech companies could benefit New Zealand's domestic industry. Whether this is the case or not, it's hard to dispute that the bank's collapse will reverberate through global markets and impact New Zealand.

"Realistically, our stock market is not going to be flash on Monday and there is probably a period of more subdued tracing while people get their head around what all this means, the risk, I think, is more for the tech sector across the world," economist Brad Olsen said.