US puts limits on Wells Fargo

AFP, WASHINGTON: US banking regulators Tuesday said they are prohibiting Wells Fargo from opening new international branches until it fixes continuing deficiencies in its bankruptcy plan.
The so-called “living will” is required of all large US banks to ensure that in the event they need to declare bankruptcy, they can be dismantled in an orderly fashion without the kind of upheaval seen during the 2008 financial crisis, that endangers the broader financial system.
The Federal Reserve and Federal Deposit Insurance Corporation ruled that Wells Fargo failed to provide a sufficient fix in two areas of its plan despite multiple tries.
As a result, the bank will not be able to open any foreign branches, nor will it be able to acquire any non-bank subsidiaries, the agencies said.
Wells Fargo, already suffering from a scandal over thousands of bogus accounts opened to boost its business, has until March 31 to submit a revised plan to fix the deficiencies identified in its living will.

US puts limits on Wells Fargo

AFP, WASHINGTON: US banking regulators Tuesday said they are prohibiting Wells Fargo from opening new international branches until it fixes continuing deficiencies in its bankruptcy plan. The so-called living will is required of all large US banks to ensure that in the event they need to declare bankruptcy, they can be dismantled in an orderly fashion without the kind of upheaval seen during the 2008 financial crisis, that endangers the broader financial system. The Federal Reserve and Federal Deposit Insurance Corporation ruled that Wells Fargo failed to provide a sufficient fix in two areas of its plan despite multiple tries. As a result, the bank will not be able to open any foreign branches, nor will it be able to acquire any non-bank subsidiaries, the agencies said. Wells Fargo, already suffering from a scandal over thousands of bogus accounts opened to boost its business, has until March 31 to submit a revised plan to fix thedeficiencies identified in its living will.