Did You Know Wells Fargo has a Living will?
On Tuesday, regulators determined for a second time this year that the Wells Fargo "living will" fell short.
Wells Fargo is one of eight leading banks that must outline how they would be unwound in an orderly way in bankruptcy. Wells Fargo was one of five banks to fail an initial assessment in April. State Street Corp (STT.N), JPMorgan Chase & Co (JPM.N), Bank of New York Mellon [BKNYK.UL] and Bank of America Corp (BAC.N) passed on Tuesday.
Wells Fargo may submit an amended living will by March 31. The restrictions may then be lifted if the Federal Reserve and Federal Deposit Insurance Corporation allow.
"We believe we will be able to address the concerns raised today in the March 2017 revised submission," the bank said in a statement.
TOO BIG TO FAIL
Living wills were conceived in the wake of the 2008 financial crisis when the downfall of several Wall Street banks sent shockwaves through global markets.
U.S. taxpayers had to prop up banks that were deemed "too big to fail" and Congress vowed that such a rescue would not happen again.
Now that it has failed to satisfy regulators, Wells Fargo is on a regulatory path that could end with the bank being ordered to shrink in two years.