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Wells Fargo & Co. finally escaped a Federal Reserve asset cap that has restricted its size for more than seven years, unleashing the firm from the unprecedented punishment in a major win for Chief Executive Officer Charlie Scharf. The bank’s shares surged.
The Fed said in a statement Tuesday that Wells Fargo met all conditions required by an enforcement action imposed on the bank in 2018 to remove the restriction. The central bank completed its review of Wells Fargo’s remediation efforts and third-party assessments, as well as its own assessment of the bank’s corporate governance and risk management programs, it said.
The hotly anticipated verdict closes the door on nearly a decade of scandals at the fourth-largest US lender and allows the bank to pursue growth again. Since the cap was imposed in February 2018, it became the most-feared punishment in banking and caused Wells Fargo to miss out on about $39 billion in profits by one measure.
The Fed said that other elements of the 2018 enforcement action will remain in place for now.
Today's show features:
- Bloomberg News US Finance Team Leader Sally Bakewell on Wells Fargo being released from a Federal Reserve asset cap that has restricted its size for over seven years
- Bloomberg Radio and Television Anchor Alix Steel on Meta's deal to buy nuclear power from Constellation Energy to help run its AI platforms
- Bloomberg News National Security Team Leader Nick Wadhams on President Donald Trump’s decision to attend the upcoming NATO summit and NATO’s push to boost European to air defenses
- Katy Kaminski, Chief Research Strategist of AlphaSimplex on key trends to watch in the equity and bond markets
- Eric Clark, Chief Investment Officer at Accuvest Global Advisors on consumer-focused ETFs and investing strategies
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