Fed's Wells Fargo Punishment Sets Precedent for Harsher Era
- Stance may be at odds with Trump’s deregulatory push
- Does asset cap signal a new reality or Yellen’s final salvo?
This article is for subscribers only.
The Federal Reserve just devised a harsh new punishment after Wells Fargo & Co. landed in scandal after scandal -- one that may haunt every big bank.
The San Francisco-based lender had its rating cut by three analysts and fell by the most in more than two years on Monday after the Fed banned the bank from growing until it convinces authorities it’s addressing shortcomings. The cap on total assets could cost it $400 million in profit this year and handicap it long-term by giving its largest competitors an advantage in pursuing new business.