https://www.fool.com/investing/2021/09/30/3-reasons-wells-fargo-wont-be-broken-up/
8 replies (most recent on top)
How many divisions/departments have they sold or closed? I would say that's a technical break-up.
I'm working on a "regulatory finding" now.
Don't assume that some of them aren't BS. There are a lot of incompetent regulators. That is why they are government employees and not in the private industry
Wells will be broken up if viable reforms are not handed out by the end of Q1. My guess only, but going by the vibes of the outside community.
Regulators finding issues with Wells Fargo is the regulators doing something: nowhere in that do you seem to deny the validity of WF's many problems. And "someone else also commits crimes!" is likewise not a very good defense. You guys need to stop thinking whataboutism is this ultimate gotcha.
The difference between WFC, JPM, BoA and Citi is WFC got caught swindling a large amount of people a little bit of money.
JPM manipulated markets in a much larger way but affected less people.
https://fortune.com/2020/09/30/spoofing-jp-morgan-cases-manipulation/
BoA was recently hit with a fine for fake overdraft charges.
https://www.reuters.com/business/bank-america-reaches-75-mln-settlement-over-excessive-fees-2021-05-14/
Citi was hit with a $400 million fine a year ago for compliance issues.
https://www.reuters.com/article/usa-citigroup-enforcement-idUSKBN26T0BL
There is nothing unique about Wells Fargo. Wells Fargo is just the regulator and politician punching bag at the moment to make it look like they are doing something.
I enjoy hearing other viewpoints, but the points made in this article are those of an outsider who only knows what Charlie/the bank wants the public to hear.
“Progress” is in the eye of the beholder and anyone can attempt to put a positive spin on anything (Lipstick on a Pig). Change is not necessarily Progress. New leaders are not necessarily better leaders, they are just possibly less experienced, less invested leaders.
My thoughts are that we are too big to pull off properly turning the entire ship around. Other financial institutions are big or bigger, but they apparently have had better processes, better technology and better leaders in place for a long time and aren’t challenged with having to be completely dismantled and rebuilt from the ground up.
If nothing else, we should have regulators in the bank on a daily basis watching what’s happening and asking the right questions. (Audit and Risk ask lots of questions, but not the right questions.) Similar problems are happening today that were happening 5 and 10 years ago - they have just been repackaged, reframed and driven deeper underneath the surface.
Strictly for the employees’ sakes, I don’t want to see the bank be broken up. But I do think it is the right way to go, unfortunately.
Replacing key management and leaders only makes a difference if they actually improve the bank.
They haven't, as evidenced by 2 years of flat to negative WFC share price growth.
That is a failure, by definition.
- Key Points
Breaking up the bank would not address the institution's main problems, which occurred in its core banking unit.
Wells Fargo has the smallest investment banking arm of its peer group, and has actually simplified its business a great deal.
The bank has largely replaced most key management and leaders, and made noticeable progress.