https://www.bizjournals.com/sanfrancisco/news/2020/09/15/bank-investor-urges-removal-wells-fargo-asset-cap.html
6 replies (most recent on top)
@psk+16YYBEez although I generally agree with your comment you have to admit the political climate has changed drastically in the last few years and likely has some influence on how regulators act towards the banks.
The US economy is not purely capitalist. If it was, your money on deposit would not be protected by the FDIC and the bank could do whatever it wanted with your money, Wachovia would have been permitted to go under, and there would be no interest rate policy and no Federal Reserve borrowing window.
People that throw around the term socialism rarely appear to understand how the economy and financial sector actually work.
who cares, we need someone to get this fixed; this is an anti-capatalist move by the Feds, they want to move country to communism - Elizabeth, Bernie and others
This guy is proof of why you never listen to these analysts. He cares about his dividend and the stock price only. The Federal Reserve is concerned with the stability of the financial system at large.
The analyst thinks it’s fine to rip off customers so long as you pay a fine. The regulators think the bank should be stable, not rip off customers and manage risk more than one quarter of profit at a time.
It’s not that the regulators don’t think the bank has paid enough fines, it’s that the company continues to ignore problems and ripoff customers, so paying fines was obviously insufficient punishment.
@cko+
There are definitely incentives. The stock grant to Scharf is spread into a 5 year period. There are strong incentives to ensure the risk control process working properly and improve it along the way to prevent any future problems.
If the FRB lists the cap, there is no incentive for Chainsaw and the board to keep its pace and investment on the risk and control work. All that’s been done so far is waste 4 years with incompetent management, rename some things, bring in high priced unproductive/ overrated outsiders, and shuffle people around. Fundamentally the plumbing around managing risk and compliance and associated controls has not changed from 2016. Much work is left to do to actually put the plumbing in to flow information the right way to manage risk.