| April 13
April 13 Wells Fargo & Co's failure to
convince regulators it can go through bankruptcy without
severely disrupting financial markets is effectively costing the
bank $100 million in trading revenues each quarter, its
management said on Thursday.
In December, Wells Fargo failed a so-called living will test
administered by U.S. bank regulators. As a result, the bank is
not allowed to establish international bank entities or acquire
non-bank subsidiaries until regulators sign off on an amended
Regulators can eventually force Wells Fargo to shrink its
balance sheet to the level it was at on Sept. 30 if it does not
appease them within two years.
Instead of waiting for that possibility, the third-largest
U.S. bank is keeping its balance sheet at that size.
"Because we wouldn't want to put ourselves in the position
of having to make an abrupt change for something that was out of
our control, we decided to leave things at that level, and
they're still operating there today," Chief Executive Tim Sloan
said on a call with analysts after the bank reported
Chief Financial Officer John Shrewsberry said Wells Fargo is
holding lower trading assets to maintain balance sheet size, a
decision that prevents the bank from earning an extra $100
million per quarter.
(Reporting by Dan Freed in New York; Editing by Lauren Tara
LaCapra and Meredith Mazzilli)