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Opinion of the Court
and directors to serve in our financial institutions"). But we have not found other such statements. And that statement is inconsistent with the language of the Senate Report. It suggests an interpretation of the statute largely rejected in the lower courts, namely, that it pre-empts stricter state law as applied to state-chartered, as well as to federally chartered, institutions. See, e. g., McSweeney, 976 F. 2d, at 540- 541 (rejecting the interpretation as applied to state-chartered banks); Canfield, 967 F. 2d, at 448-449 (same).
The petitioner, in the courts below and as an alternative ground in this Court, made a final complicated argument to explain why 12 U. S. C. § 1821(k) displaces federal common law. He points to the universally conceded fact that the "gross negligence" statute applies to federal, as well as to state, banks. He then assumes, for sake of the argument, that in the absence of the statute, federal common law would determine liability for federal banks. He then asks why Congress would have applied the "gross negligence" statute to federal banks unless it wanted that statute to set an absolute standard, not a floor. After all, on the assumption that, without the statute, federal common law would hold federal directors and officers to a standard as strict, or stricter, there would have been no need for the statute unless (as applied to federal banks) it intended to set a universal standard, freeing officers and directors from the potentially less strict standard of the common law, and not what, given the assumptions, would be a totally unnecessary floor. This argument, taken to its logical conclusion, would also suggest that state standards of simple negligence would be displaced by the federal gross negligence statute.
One obvious short answer to this ingenious argument lies in the fact that our conclusion in Part II runs contrary to the argument's critical assumption, namely, that federal common law sets the standard of liability applicable to federal banks. State law applies. Without that assumption, the need for a "gross negligence" floor in the case of federally chartered banks is identical to the need in the case of state-chartered
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